Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
About 3 weeks ago 128
Hi, I know there are lots of questions and answers on this topic but just trying to find the right solution for me. I am married and me and my wife have our own joint home
Before marriage I bought a BTL property, both the property deeds and the mortgage is in my name only. Nothing in the wife’s name
Property value is about £250k. Mortgage is Interest Only, and outstanding Mortgage balance is approx £120k.
I am a high earner, so I pay 40% on the property Income. My wife on the other hand, works a few days a month, so very low earner. I would like to show majority of the BTL income as received by her, say 99% or even 100%, as she manages everything to do with the property and has no real major income otherwise.
I was told by a Prop Tax person that all I need to do to do this, is by utilising a Trust Declaration, and you simply agree 100% beneficial interest with your wife and she can then receive all the rental income. That’s it, not much more and then my wife does a tax return showing the income. Is this correct?
Also he said, having a rental property is classed as a business. The mortgage interest payments are an allowable business expense against the rental income. It is irrelevant who is named on the mortgage since it is deducted as an expense from the rental income. The important aspect is the question of who receives the net income after deduction of the relevant expenses. So I wouldn’t need to change the mortgage deeds, she can deduct the expenses on her Tax return, again does this sound right?
I was planning to change the mortgage deeds/property deeds into joint ownership and then at the same time do a Tenants in Common agreement so that she receives 99% of the income. But this is obviously more complex, so if I can do what the Tax person above said, that would be much simpler.
Any help would be appreciated
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