It is not uncommon for the owner of an investment property (e.g., a parent) to wish to transfer rental income (e.g., to adult offspring) but retain ownership of the property. However, the tax implications need careful consideration. How much to give away? For example, the gift of a property interest is treated as a disposal… Read More »
Individual owners of buy-to-let rental properties generally assume there are no National Insurance contributions (NICs) to pay on their rental profits (as there is for self-employed individuals carrying on a trade). Class 4 NICs Self-employed individuals are generally liable to Class 4 NICs on net profits chargeable to income tax as trading income (and which… Read More »
This is generally sensible, particularly if the taxpayer does not have a professional adviser. However, things can sometimes go wrong, and caution is needed. Misunderstandings can easily arise. Pre-letting expenses For example, in Negka v Revenue and Customs [2019] UKFTT 0082 (TC), the taxpayer bought a residential property on 12 July 2013. She lived there… Read More »