Tax on rental income

hazelhand

Hi All,

I have a house rented for several years and I have been filing tax returns...
I have been filing returns for the house in full but the house is owned by 3 of us, problem is is that the mortgage is only in my name.
My question is, could I start filing as 33% ownership of house and the others to do the same or do I need to keep filing with 100% ownership as the mortgage is in my name only.
Also there is no legal document stating the others also own house.

Tia

Geuze

If three people own a house, then the rental income is split three ways.

You appear to have been claiming that you receive all the rental income.

Also, of course there are legal documents, surely you went through conveyancing when ye bought?

hazelhand

I deal with everything for the house, the rental income goes towards the mortgage and then we all pay the difference, and we all share the expenses, etc for house. There are no legal documents, it was all done in my name at the beginning and we meant to get something written up but we never got round to it (silly I know)

whippet

hazelhand wrote: »

I deal with everything for the house, the rental income goes towards the mortgage and then we all pay the difference, and we all share the expenses, etc for house. There are no legal documents, it was all done in my name at the beginning and we meant to get something written up but we never got round to it (silly I know)

is the tax bill split 3 ways or how do you account for that?

Geuze

hazelhand wrote: »

I deal with everything for the house, the rental income goes towards the mortgage and then we all pay the difference, and we all share the expenses, etc for house. There are no legal documents, it was all done in my name at the beginning and we meant to get something written up but we never got round to it (silly I know)

Then you own the house.

These other people are contributing towards the maintenance of an asset that they do not own.

Odd.

hazelhand

Up until now I was doing it all under my tax, and they would pay me 1/3 each if anything was owed.
But I would like to be able to just do my 1/3 under my tax details and for the others to do the same, I just don't want to mess it up.

lawred2

hazelhand wrote: »

Hi All,

I have a house rented for several years and I have been filing tax returns...
I have been filing returns for the house in full but the house is owned by 3 of us, problem is is that the mortgage is only in my name.
My question is, could I start filing as 33% ownership of house and the others to do the same or do I need to keep filing with 100% ownership as the mortgage is in my name only.
Also there is no legal document stating the others also own house.

Tia

what?

.
.

um

.
.

what?

hazelhand

Geuze wrote: »

Then you own the house.

These other people are contributing towards the maintenance of an asset that they do not own.

Odd.

that's exactly it!

phormium

Are their names on the deeds or not? If not then they don't own it officially.

Very odd if you have a sole mortgage and 3 on deeds, it's more likely to be the other way around as otherwise you have been given a mortgage on a property you don't fully own.

hazelhand

phormium wrote: »

Are their names on the deeds or not? If not then they don't own it officially.

Very odd if you have a sole mortgage and 3 on deeds, it's more likely to be the other way around as otherwise you have been given a mortgage on a property you don't fully own.

No their names are not on deeds or mortgage.

lawred2

hazelhand wrote: »

No their names are not on deeds or mortgage.

why do you say that the three of you own it?

hazelhand

lawred2 wrote: »

why do you say that the three of you own it?

We have all paid equally into it since the beginning. Back when we bought it I got the mortgage easily and instead of reapplying with all of our details we just went ahead with it. We were to get a legal document done up stating the ownership was between 3 but it has never happened!

Needs Must

Do you live in the house?

hazelhand

Needs Must wrote: »

Do you live in the house?

I used to but haven't for around 9 years now

ACADasltiv

You are the sole owner. The others may have a valid claim on part of it, but that's something that would need to be contested. You can't say you only own 33% and so only get 33% of the income when preparing your tax return as it would be a lie.

As things currently stand you will need to get the other two to put their name on the mortgage in order for them to jointly own the house with you. Without this bank are not going to allow either of them to own part of the house as it would reduce the value of your share and thus their security to 33% of the value of the house.

lawred2

ACADasltiv wrote: »

You are the sole owner. The others may have a valid claim on part of it, but that's something that would need to be contested. You can't say you only own 33% and so only get 33% of the income when preparing your tax return as it would be a lie.

As things currently stand you will need to get the other two to put their name on the mortgage in order for them to jointly own the house with you. Without this bank are not going to allow either of them to own part of the house as it would reduce the value of your share and thus their security to 33% of the value of the house.

Wonder if those other two claimed FTB grants elsewhere in the meanwhile?

phormium

Doesn't matter if they did, based on the info provided they don't own this house anyway legally.

hazelhand

lawred2 wrote: »

Wonder if those other two claimed FTB grants elsewhere in the meanwhile?

Nope, 1 lives in England and the other doesn't own any other property

FishOnABike

Legally it looks like you are the sole owner of the property and solely liable for the mortgage.

You might want to get financial advice on changing this to joint ownership + joint mortgage as there may be capital gains tax implications for the other two people if you transfer any equity in the property to them.

hazelhand

Thanks for all the replies

whippet

i'm not tax expert but i'd look in to the tax implications of getting payments from others to cover the tax bill ... you might need to declare these as income.