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Transferring property rental income: Anti-avoidance traps

Shared from Tax Insider: Transferring property rental income: Anti-avoidance traps
By Lee Sharpe, December 2023

Lee Sharpe looks at the main rules that govern a taxpayer transferring rental income rights to another. 

This short article will cover the key aspects of ownership and splitting income, in terms of co-owned property. Note in particular that there are special rules for property owned between those in a married couple (or civil partnership) that can complicate matters. Note also that the rules for property ownership differ a little in Scotland, and readers should check that the rules align in the devolved territories of the UK. 

Tax follows beneficial ownership 

Generally, direct taxes focus on ‘beneficial ownership’ (also referred to as a person’s ‘equitable interest’ in a property) as distinct from legal ownership. While it is very common for those with legal title also to hold the equitable interest in a property, they could instead fall to different

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