A sole trader and his assets

[Flure]

Advice please.

My wife and I jointly own a flat that we rent out.

We are jointly applying for a repayment remortgage on our own (fully owned) property to release capital that we will use (along with some savings) to purchase a cottage that we will rent out as a holiday let.

My understanding is (and it's here I need advice) that if I register as a sole trader, I can run the rentals as a business "within the assets".

By that I mean that although the assets are jointly-owned by my wife and I, the rental is my business only. And the income from such shall be treated as mine only.

My wife is a higher rate taxpayer, and I pay the lower rate on my pension income.

I further believe that "the business" can pay my wife the sum of interest that is her proportion of the monthly interest paid on the mortgage.

Could someone give me a reality check on comment on my assumptions?

Thank you from a first time poster.

 

[Flure]

That'll be a "Don't Know" then?

 

[Lease4Less]

Advice please.

My wife and I jointly own a flat that we rent out.

We are jointly applying for a repayment remortgage on our own (fully owned) property to release capital that we will use (along with some savings) to purchase a cottage that we will rent out as a holiday let.

My understanding is (and it's here I need advice) that if I register as a sole trader, I can run the rentals as a business "within the assets".

By that I mean that although the assets are jointly-owned by my wife and I, the rental is my business only. And the income from such shall be treated as mine only.

My wife is a higher rate taxpayer, and I pay the lower rate on my pension income.

I further believe that "the business" can pay my wife the sum of interest that is her proportion of the monthly interest paid on the mortgage.

Could someone give me a reality check on comment on my assumptions?

Thank you from a first time poster.

If the property is jointly owned by you and your wife, you cannot suddenly delcare that the rental generated is purely yours as a Sole Trader. You will have to class the venture as a partnership as your wife has a financial interest in the property. I assume you either have a joint commercial or buy to let mortgage?

From what you have said, it is clear that you want to do things for your wife to avoid paying tax. You need to speak to an accountant, but I would imagine that she will still have to declare this on a tax return.

 

[Flure]

If the property is jointly owned by you and your wife, you cannot suddenly delcare that the rental generated is purely yours as a Sole Trader. You will have to class the venture as a partnership as your wife has a financial interest in the property. I assume you either have a joint commercial or buy to let mortgage?

From what you have said, it is clear that you want to do things for your wife to avoid paying tax. You need to speak to an accountant, but I would imagine that she will still have to declare this on a tax return.

Thanks for the reply.

We will be remortgaging our own home to provide the money for a cash purchase of the holiday home.

I am thinking that my wife's interest in the holiday home is one of capital in the asset.

The rental business would be mine, and only count as income against me as a sole trader.

I'm seeing an accountant tomorrow. I'll post back.