How do you use a Deed of Trust to transfer property income?

[traxx]

Someone told me that if I have a let property which is owned by myself and my wife that I can use a Deed of Trust to transfer all the income into her name and take advantage of her tax position?

Anyone know a link which explains this?
(every search I do just come up with mortgage details)

[Eric Mc]

It's a legal matter and will require registering various documents with the Land Registry.

[Wings]

traxx said:

Someone told me that if I have a let property which is owned by myself and my wife that I can use a Deed of Trust to transfer all the income into her name and take advantage of her tax position?

Anyone know a link which explains this?
(every search I do just come up with mortgage details)

How much income are you talking about, is there no way where the wife can be paid your share of the profitable income to both manage, clean, decorate, maintain the property?

[traxx]

Wings said:

How much income are you talking about, is there no way where the wife can be paid your share of the profitable income to both manage, clean, decorate, maintain the property?

Is that allowed?

btw we are talking about ~£20,000/year

[Eric Mc]

You COULD pay the Mrs that amount to manage the property but you might have a hard time justifying that level of cost for the nature of the services provided. The wife would need to register as a "Self Employed Property Manager" and declare the income on her own self assessment tax return - and of course pay the usual Income Tax and National Insurance (Class 2 and Class 4).

[dsl2]

I used a deed of trust to split ownership of a small industrial estate of 7 units with my wife allowing us to each use our annual capital gains exemption against profits when I sold one off.

I see no reason as to why the same wouldn't apply to rental income too.

[Rambaud]

You cannot transfer 100% of the rental income to a spouse, as that would imply 100% sole ownership. But (say) 1:99 is fine.

A Declaration of Trust would be required.

A completed Form 17 has to be filed with HMRC within 60 days if the split is NOT to be 50:50.

The rules are different unmarried individuals.

There could be SDLT implications for a mortgaged property.

I would recommend professional legal advice.