Financial Planning / Tax Advice needed

by Mike Docherty

8:52 AM, 27th August 2017
About A year ago

Financial Planning / Tax Advice needed

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Financial Planning / Tax Advice needed

Dear all,

I am a landlord with 3 rental properties that all earn a reasonable profit (and therefore tax). The properties are jointly in my name and my wifes.

I am currently employed but my wife has recently decided to take a 1-2 year (maybe longer) break to look after our children.

In addition, I have just accepted a job in Atlanta, USA and we will be re-locating in January for approximately 2 years.

I have always done my own tax returns as up until now it’s been relatively straight foward. However, I feel now that I need professional advice to minimise my tax liability.

What I’m mainly considering is whether now is a good time to pass ownership of the properties to my wife as she will not be earning an income. I’m open to other ideas/strategies!

Can anyone point me in the right direction of who / how I can get help?

Many thanks!

Mike D



Comments

Mark Alexander

8:59 AM, 27th August 2017
About A year ago

Hello Mike

Thank you for posting your question.

The following must not be construed as advice at this stage but from what you have explained, I suspect a partnership will be the optimal tax structure for you and your wife. We usually sell our "Guide To Forming A Property Partnership" for £5.99 via the link below, however, I have decided to email a complimentary copy to you in this instance as a thank you for posting your question.

https://www.property118.com/tax/setting-property-partnership/

The key advantage to forming a property partnership is that you can allocate profits disproportionately to ownership. Therefore, you can optimise the full use of both of your nil rate bands and your basic rate tax allowances.

If you plan to remain non-resident for tax purposes for more than 5 years then you may also benefit from non-resident CGT rates if you decide to sell any of your properties. This is a complex matter but one I have significant knowledge of, because I am non-resident for UK tax purposes myself.

Please also note that when you become non-resident for UK tax purposes you will also need to complete and file with HMRC form NRL1, otherwise, 20% witholding tax will need to be deducted from gross rents by either your letting agent or your tenant and remitted to HMRC. I have provided a link below to the guidance noted and the form on HMRC's website below.

https://www.gov.uk/government/publications/non-resident-landlord-application-to-have-uk-rental-income-without-deduction-of-uk-tax-individuals-nrl1

Mike Docherty

15:48 PM, 27th August 2017
About A year ago

Thanks Mark, looks like great advice and thanks for sending through the Ebook! This is the direction I think I'll head! Mike


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