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Sam
Sam, Accountant
Category: UK Tax
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Hi Sam, My wife and I married in 1997. The house is our

Resolved Question:

Hi Sam,

My wife and I married in 1997. The house is our only asset.
If we were divorced we would share the value of that asset, the house. (We had 2 children before 2003.)
Tax law contradicts my wife's right to a share of the matrimonial
home. There must be a way to establish that legal right?
Mark
Submitted: 1 year ago.
Category: UK Tax
Expert:  Lindie-mod replied 1 year ago.

Hello,

I'm Lindie, and I’m a moderator for this topic. I sent your requested professional a message to follow up with you here, when they are back online.

If I can help further, please let me know. Thank you for your continued patience.

Best,

Lindie~Moderator

Expert:  Sam replied 1 year ago.

Hi Mark

 

Thanks for your question and asking for me.

 

When did the marital home cease to be the your main residence? (When did you move out)

 

Thanks


Sam

Customer: replied 1 year ago.

Hi Sam,


The house was sold in March 2012.


 


 


Mark

Expert:  Sam replied 1 year ago.

Hi Mark

 

Thanks for this information, but is this also the date that the property ceased to be your home?

If so, then please expand on what you are seeking to establish.

 

Thanks

 

Sam

Customer: replied 1 year ago.

Hi Sam,


 


I asked about the rights my wife has to a share of the family home.


And thereby the right to derive income.


 


Mark

Expert:  Sam replied 1 year ago.

Hi Mark

 

As already stated, for tax purposes, the income is deemed to be taxed on the owner of the property, and that is you (as the deeds and mortgage are in your name only)

 

The fact she may have a right to the share of the family home in legal terms should you not remain married, has no bearing on the tax position, as for divorce purposes, this is merely a division of finances to recognise each of the spouses contribution to the marriage and their legal entitlement (which takes into account pensions, and assets, but your pension is deemed to be yours, until such time that a legal instruction states otherwise, so with assets this is no different, or imagine the mess that would ensue!)

 

Thanks


Sam

Customer: replied 1 year ago.


Hi Sam,


To conclude. My wife has the right to charge for her work in managing


the rental property?


And this is will go back to 2003?


 


Thanks


 


Mark

Expert:  Sam replied 1 year ago.

HI Mark

 

Thanks for your response

 

Not in retrospect, no, but she could have done so at the time (Had she in fact been paid for the work she undertook) but you cannot alter now, what clearly did not take place in fact.

 

Thanks


Sam

Sam, Accountant
Category: UK Tax
Satisfied Customers: 12906
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Sam and other UK Tax Specialists are ready to help you
Customer: replied 1 year ago.

Sam,


I don't understand.


My wife did work. She received income.


These are facts.


There may be a discrepancy between the income and the work.


i.e. Some money should have been paid for work.


Some money received was investment income, for which we now know she was not eligible.


 


Mark


 

Customer: replied 1 year ago.


2013 7:47 AM EST



Sam,


I don't understand.


My wife did work. She received income.


These are facts.


There may be a discrepancy between the income and the work.


i.e. Some money should have been paid for work.


Some money received was investment income, for which we now know she was not eligible.


 


Mark


Expert:  Sam replied 1 year ago.

Hi

 

Thanks for your response

 

So did she take a wage from the rental income money and this was advised to HMRC during the periods in question?

 

Thanks


Sam

Customer: replied 1 year ago.

Sorry Sam,


 


I've been trying to ask my accountant what my wifes income was.


I explained then in 2003 that my wife did work for the rental property.


He said, it didn't matter what the income was it would appear somewhere on the tax return.


He thinks it's the same thing.


 


Mark


 


 


 

Expert:  Sam replied 1 year ago.

Hi Mark

 

Thanks for your response

 

It does matter what wage your wife took - as this is the basis of trying to put matters right, and establishing what income (as employment) was taken, to amend her tax returns from rental income, and to amend yours to include rental income and allowable expenses (of which some would be the wage paid to your wife)

 

And if she had been paid a wage, then this would show clearly in monies that were paid from you to her (so backed up with bank statements and wage slips) so this creates a paper trail of evidence.

 

I am confused why your accountant states it doesn't matter what she was paid, it would appear somewhere on the tax return?? What does this actually mean, as you have previously advised that "There may be a discrepancy between the income and the work.

i.e. Some money should have been paid for work.

 

Some money received was investment income, for which we now know she was not eligible."

 

So lets look at the facts.

 

The property was in your sole name, for the period 2003 to 2012 and it was rented out and rental income received

This rental income will be treated as yours by law, and you would be considered liable to tax on net profits. You should have declared all of the rental income on your tax return. So the rental income was either paid TO you or TO your wife.

The expenses that can be deducted from the gross rents, should have been claimed on your tax return - and you advise that a wage WAS paid, so you have evidence of these transactions either through

1) Rents paid to your account and then you paying a wage to your wife OR

2) Rents paid to your wife and her deducting her wages and paying the balance of rents to you

3) Rents paid into a joint account - and your wife took a set amount as a wage

4) Some other scenario

 

But in ALL cases - PAYE was considered to allow the tax and national insurance deductions from her wages, and this wage along with relevant deductions were reported to HMRC

 

Please clarify

 

Thanks

 

Sam

 

 

 

 

 

 

 

 

 

 

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Sam
Sam
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26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax