I have been a naughty girl, should I come clean?

[mollymoo]

I bought a buy to let property in 2003. The deposit and buying costs came from an inheritance to me but to get the BTL mortgage, I had to buy the property in joint names with my husband (50:50 as tenants in common). However, the property is considered to be mine.

However, ever since, I have declared all the income etc on my own SA tax form. My husband just pays tax through PAYE. We are both basic rate taxpayers.

So, although all the correct tax has been paid, it has not been split over 2 SA forms, as it should have been.

Should I just now start completing 2 SA forms, keep stum and hope the taxman never catches on before I sell the 2 properties (another prop was bought in 2006) or come clean to the taxman?

Could HMRC force my husband to pay his share without refunding me the tax I have technical being overpaying? How far could they go back - or could they go back to 2003 for my husbands additional tax but refuse to refund me my overpaid tax back to the same date?

[jeffrey]

I'm not a tax expert; but even I know that admitting fault/blame/liability stands you in better stead than if you're found-out and prosecuted for fraud or tax evasion. Yes- come clean, 'fess up, and take what comes.

[Telometer]

It's a bit unclear as to whether OP has done anything wrong. Beneficial ownership sits clearly with her, hence her taxing the income looks right. Only problem seems to be a failure to have told the taxman about this officially.

I consider it extremely unlikely indeed that the taxman would wish to tax your husband but not let you have relief. It would be wholly inequitable.

[Poj McDodge]

An option could be to draw up a deed of trust but date it from the time of purchase, try a search.

[beancounter]

It's a bit unclear as to whether OP has done anything wrong. Beneficial ownership sits clearly with her, hence her taxing the income looks right.

Agree with both points - and even if the income should have been split equally between both parties (assuming the additional income wouldnt have pushed the OPs husband into a higher tax bracket), then the total tax paid would be the same. OP would have just overpaid by the same amount that her husband had underpaid. Net no impact.


Only problem seems to be a failure to have told the taxman about this officially.

Telometer - how would you do this ? Is it captured in the return somewhere... or do you mean write to them ?!

[mollymoo]

I am interested in the beneficial interest part of your reply. Does it make any difference that my husband and I have separate bank accounts etc and at no time was the money for the deposit in an account with my husband's name on it.

I operate a separate current account to manage the books, and that is also in my name only. Any money I have had to top up the account with has always been transferred from my own current account.

I suppose the only thing is that when I come to sell the property, it would be nice to benefit from 2 lots of CGT annual allowance.

[Telometer]

Telometer - how would you do this ? Is it captured in the return somewhere... or do you mean write to them ?!

Form 17. http://www.hmrc.gov.uk/forms/form17.pdf

If you want to benefit from two annual exemptions on sale then change the ownership prior to sale so your husband owns a portion of it - £250 and an hour with a solicitor should do it, just drawing up a deed of trust.

[jeffrey]

change the ownership prior to sale so your husband owns a portion of it - £250 and an hour with a solicitor should do it, just drawing up a deed of trust.
Yes, although there will also be at least one item to register at HMLR: Transfer and/or Restriction.