My wife and I are venturing into the buy to let market. As I am an employee of a large company and very close to the higher tax bracket, if we were to get a joint mortgage to purchase the property, is it possible to make payments to the mortgage company and whatever is left, put this in my wife's account as she doesn't work, so as we can take advantage of her tax allowance?
Arthur Weller Replies:
A husband and wife are deemed to own a property in the proportion 50:50, unless they actually own it in a different proportion, and they inform HMRC of this different split (on Form 17). So if you want your wife to receive more of the rental income (than 50%), you will have to transfer to her some of your 50% share of the property, and let HMRC know about this on Form 17 (within 60 days).
This question was first printed in Business Tax Insider in April 2012.