Splitting Rental Income for Tax Planning Purposes

Text Size

There are several ways to split rental income for tax planning purposes, the two most popular being a Declaration of Trust or one of many forms of Partnership.

The concept is to transfer rental profits to a lower rate tax-payer. For example, one spouse may pay tax at a higher rate than the other so it could make sense for rental profits to belong to the person with the lower tax rate.

This form of tax planning is particularly popular between spouses but can also be used for business continuity and legacy planning purposes in some circumstances.

However, before rushing into this you need to carefully consider the potential implications for triggering additional tax charges. There is a lot of legislation which might create unintended consequences when transferring beneficial interest. For example, whilst there is no Capital Gains Tax on Transfers between spouses there might be if you transfer property, equity or profit share in a Partnership to your children, other people or even a company.

Then there is Stamp Duty Land Tax to consider, which can sometimes even be triggered on transfers of property between spouses if they are mortgaged.

A consultation with a Property118 Tax Planning Consultant will direct you through this minefield and with the added peace of mind that all recommendations made are bespoke and considered by a fully qualified, regulated, experienced and insured practicing Barrister-At-Law before any recommendations are adopted as their professional advice and implemented by them.

These Consultations cost just £400 inclusive of VAT and also include the review of our recommendations which is carried out by Cotswold Barristers.

Book a Tax Planning Consultation

Consultations include Fact Find, expert analysis and a recorded video conference with your Property118 Consultant and your Accountant. Thereafter, our recommendations will be reviewed by Cotswold Barristers (at no extra charge). If they agree, and if you instruct them to complete the legal work to implement our suggestions, Cotswold Barristers will adopt our recommendations as their own professional advice, for which they carry professional indemnity insurance of £10,000,000 per claim. All consultations are confidential and you will be provided with a copy of the recording of the video conference. We GUARANTEE total satisfaction or a full refund.
  • Please provide an overview of your circumstances and what you are looking to achieve.
  • Property118 is unique in terms of offering tax planning consultations for a fixed fee of £400 with a guarantee of total satisfaction or a full refund.
Related Pages