Can the whole of the rental income come to me?
I own a buy-to-let property with my boyfriend. We're tenants in common split 60-40, however we ideally would want all of the rental income to come to me as he pays higher rate tax. Is there a way we can change this percentage split to 99%-1%? If this isn't possible, what's the maximum split we could do? How do we go about notifying HMRC of this change - do we need to do it through our solicitors? Also, if we one day sold the property would him only having 1% stake in it affect his CGT tax-free allowance?
Arthur Weller replies:
You can draw up a written agreement saying that even though the property is owned 60:40 nevertheless the rental income is received 99:1. Then make sure the money actually goes to a bank account in your individual names in the proportion 99:1. You do not need to inform HMRC and you can draw up a written agreement yourselves, without involving solicitors. This arrangement will not affect the underlying ownership of the property, so that when it is eventually sold the sale proceeds will be received 60:40.
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