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I have a buy to let house .if I were to be making a profit

on the rent I charged...
I have a buy to let house .if I were to be making a profit on the rent I charged ,would I have to pay tax on that ?
I don't work ,and have no income ,but my husband works and pays tax
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Answered in 11 minutes by:
10/6/2017
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 5,019
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

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Thank you fro your question..

How much profit do you intend to make on rental income

- before interest on loan if any

- after interest

Many thanks

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Customer reply replied 1 month ago
Well ,I was going to make a lump sum payment onto the buy to let ,which would take the mortgage payment down sufficiently to net about £400 profit .

Thank you for your reply.

Property income is taxable for income tax purposes.

You are entitled to have an income of £11,500 (equivalent to your personal allowance) in the current tax year before it becomes taxable.

As the profit is well short of this figure and you have no other income, you won't pay any income tax on rental income.

I hope this is helpful and answers your question.

taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 5,019
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Verified
taxadvisor.uk and 87 other UK Tax Specialists are ready to help you
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Customer reply replied 1 month ago
Even if the house is in both mine and my husbands name ,I still wouldn't have to pay tax ?

I thank you for accepting my answer.

Best wishes.

It is the first time you are mentioning ownership in both names. Up to now, you have referred the situation as if I have to ....

If the property is in joint names, the tax man will normally treat income as shared equally between the spouses. In this case your share of the income will be 50% of the total and your husband would be responsible for declaring the other 50% on his tax return.

I hope this is helpful.

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Customer reply replied 1 month ago
Oops sorry .is there any way the entire £400 could be in my name ,and not come under his tax ?
Could he somehow assign the £400 to me ,sort of as my income ?

Thank you for your reply.

An option is to have the property in your sole name so you only have to declare the rental income. He can't assign the entire income to you without tax implications if the property is in joint names.

Say six months prior to disposal transfer 50% of your share to your husband. Transfers between spouses do not attract capital gains tax.

This way when you sell the property, you would be able to claim two lots of gains allowance.

I hope this helps.

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Customer reply replied 1 month ago
What if the £400 was being used to pay for other things ,such as insurances ,and other fees associated with the house ?

You should be able to deduct all property running and maintenance expenses against the rental income before arriving at the profit. It is this profit after all property allowable expenses that is taxable.

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Customer reply replied 1 month ago
Would I be allowed to pay my own.mortgage payment each month using the £400
Customer reply replied 1 month ago
Do you know how much tax we would have to pay on £400 ?

You can do what you like with the money after you have paid tax on it if any.. paying your own mortgage is not an allowable expense as it does not relate to the property that is giving you a rental income.

If the income after all allowable expenses was £400, you share of £200 will be tax free and your husband would pay tax on his share (200 x 12) 2400 x 20% --say £480 in a year provided he is a basic rate tax payer.

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Customer reply replied 1 month ago
How would the tax man get the money from my husband ,do they take it off his wages ?

You are asking me question unrelated to your original question.

You should ask a new question per JustAnswer terms.

He will have to report his share of the income/profit on his tax return and can request that tax be deducted through PAYE tax code.

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