Tax advice of the week: Transfer property to an LLP
If you own a rental property with your spouse and want them to receive the income because they pay tax at a lower rate, consider a Limited Liability Partnership.
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).
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
‘Why I have ditched my Help to Buy ISA for cash savings and the stock market’Without the 25% bonus, my Help to Buy ISA is effectively redundant, says MoneyWeek writer Sam Walker.
-
Is your inheritance tax allowance cut if you sell to downsize or sell your home to pay for care?Downsizing relief is a little-known benefit that could save your loved ones tens of thousands of pounds in inheritance tax after you’ve died.
