The taxman is insistent. When it comes to income from investments, whether from shares or a rental property, you should pay tax on the income in proportion to your ownership of the asset, says Tax Tips & Advice. So is there a way round this? How about, for instance, if you own a rental property with your spouse and want them to receive the income because they pay tax at a lower rate?
The simple solution is to transfer your share of the property into your spouse's name. But this is "cumbersome" if you wish to vary the income year to year, you may not wish to transfer all your assets to your spouse. One way of allowing you to allocate the income as you wish, but retain 50/50 ownership, is to transfer the property to a Limited Liability Partnership (LLP). LLPs can divide profits as they see fit, without any regard to who owns what (see BIM72115).
This arrangement can also work in other circumstances not just for husbands and wives but seek advice from your accountant to make sure the LLP is set up correctly.
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