Tax allowance for partner

[shirleyb]

Question on behalf of a friend actually. He works as a self employed painter. Earns £17k per annum. She is a housewife. They jointly own 4 btl's. 50% of her personal allowance is used on the btl's leaving 50% unused. Could he pay his wife , say, 45 pound ish per week to 'do paperwork. take cheques to bank etc.,' to use up the rest of her allowance rasther than lose it ? Would the tax man accept this and would he need to see any evidence ?

[TaxationPete]

I suspect it will get questioned by HMRC as you both own the rental business. You could use a Deed of Trust and transfer the an extara share of the rental property or properties to you wife thus increasing her beneficial ownership thus her rental income and use her allowance that way. Regards Peter

[alex_bisgrove]

In a similar vain. My wife does not have any ownership of my rental property. Can I then pay her to do some of the admin, again making use of her tax allowance to create some expense to offset my rental profits. I thought so long as I’m not her sole customer she has a credible independent business operated as a sole trader which we can work to ensure does not generate enough income to trigger tax.

[TaxationPete]

It would have to be in proportion to the amount of work she actually does. She would have to be self employed and declare any income to HMRC and may be laible to N.I. contributions. Regards Peter