Buy To Let Question

[alex1011]

I have a property which is rented out for £2,000 pcm. I transfer the net proceeds of circa £1500 (minus agents fees, maintenance etc deducted) to my Mum each month to support her.

My Mum doesnt have another income so would pay less tax than me. Is there a way for me to not complicate/change the ownership structure of the property, without me paying tax on the £1,500pcm income

I.e. her giving me an invoice (or something similar) each month for this amount, will mean she is liable for the (lower) tax bill?

Thank you so much for any help/advice!!

[MrButton]

Nope

[ladymuck]

You could employ her? If she's over state retirement age there would be no NI to pay and just a bit of PAYE on the salary.

You then reduce what you take from your company by £1500 a month as you'll be keeping it.

Obviously, do the sums and make sure it adds up.

[GhostofTarbera]

Does you Mum spend this £1500 or perhaps give you back £1K in cash ?




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[eek]

You could employ her? If she's over state retirement age there would be no NI to pay and just a bit of PAYE on the salary.

You then reduce what you take from your company by £1500 a month as you'll be keeping it.

Obviously, do the sums and make sure it adds up.

What would she be doing to justify the salary - HMRC would see right through it if they went looking...

[NowPermOutsideUK]

A fascinating question which I think a lot of people have wondered myself included

Basically the op would like to use someone as a tax mule who is not his spouse

Would be interested to know if anyone has actually done this and gone through a hmrc investigation

I’m guessing a back to back transaction where he rents it to his family who then sublets it at at a higher price might work together whether the family member can be an agent and take a slice.

Definitely interested in other peoples view

[BR14]

A fascinating question which I think a lot of people have wondered myself included

Basically the op would like to use someone as a tax mule who is not his spouse

Would be interested to know if anyone has actually done this and gone through a hmrc investigation

I’m guessing a back to back transaction where he rents it to his family who then sublets it at at a higher price might work together whether the family member can be an agent and take a slice.

Definitely interested in other peoples view

inneresting

[ladymuck]

Well I took the question at face value of someone helping their parent rather than using them as a money laundering tool.

I didn't realise an employee had to have a defined purpose if you want to give a person a regular income to help them make ends meet but still pay the right taxes.

The £1500 income from BTL goes to OP and they declare it on their SATR.
OP pays their mother a salary of £1500 a month from their company.
OP reduces the amount of drawings from their company by the amount they earn from the BTL.

Is that really illegal?

[fullyautomatix]

Question is simple, can I avoid tax on my income.

Answer is simple, Nope.

[anim]

What the OP wants is called life rent. Look it up.
This is also the only legal way not to pay SDLT on second+ home.