Self assessment Question?

[tight fart]

So now we are both retired I’m doing the self assessments myself, all pretty straightforward except that I’m unsure how to split rental income we receive to maximise my wife’s tax free allowance. At present we split 50/50 but would the tax man object if we split it say 60/40 in her favour?
It’s a commercial let so nothing to reclaim.

[alscar]

I believe you cannot just pick any ratio of ownership but it has to "match " how the property is held in the same way that savings income held jointly is "always " now taken as 50/50.

[Countdown]

tight fart said:

So now we are both retired I m doing the self assessments myself, all pretty straightforward except that I m unsure how to split rental income we receive to maximise my wife s tax free allowance. At present we split 50/50 but would the tax man object if we split it say 60/40 in her favour?
It s a commercial let so nothing to reclaim.

For HMRC to accept an unequal split of income you need to set up a beneficial interest (Express Trust) in favour of your wife.

https://osborneslaw.com/blog/beneficial-interest-i...

There are downsides of doing this so make sure you "trust" her completely

[PhilboSE]

As above, the declared benefit of the rent must represent your provable shares in the property. Changing the nature of the ownership split has CGT implications, so usually what you gain on the swings you lose on the roundabouts and it’s easier to keep it at 50/50 on the income.

[tight fart]

Thanks everyone, 50/50 it stays.

[Armitage.Shanks]

If you're both paying the same rate of tax then you've got no skin in the game. But if a spouse is a non tax payer (or one basic the other higher rate) then a Declaration of Trust assigning them the max percentage to use up their taxable allowance makes sense. Very easy to do, even easier if one owns it outright.