Renting out property by a wife while it is owned by husband. Rental income in Form 11.

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Tunerokk

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Hi all.

A husband and a wife are jointly assessed in Form 11. Husband earns gross €60,000, PAYE. Wife doesn't work. Husband also owns a house for renting out. Wife is a landlord of that house (kind of appointed by husband), tenancy registered with PRTB and wife is registered as landlord there. Money from rent coming to husband's account.

In section "Irish Rental Income", Form 11, (filled in every year by husband) there are separate boxes to be ticked, for Self and Spouse. If you tick that the property is let by husband then at the end after all calculations the family will pay taxes much more than if you tick it is let by wife. It is obvious of course because wife having no job will be taxed only 20% for letting the property.

Looks like google and ai say property in terms of taxes should go as husband's income in this case. Is the only way to minimize taxes for the family is to go to solicitor and change house ownership to wife? But the point is they are assessed jointly, and for them would be beneficial if they tick the box where the house is let by wife.

The renting house was bought for cash long after marriage, so no mortgages.
 
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Doesn't the property need to be either in joint names or the wife's name in order for the rental income to be in her name and taxed as her income?
m.independent.ie

Your questions answered: Will wife's name on rent save tax?

Q: My wife and I are both retired. My wife has a pension of €18,000 a year and I have a pension of €35,000 a year. I also own a rental property (solely in my name) from which I receive €15,000 a year. Can I give this €15,000 rental income to my wife and if so, can she use the remainder of her...
m.independent.ie m.independent.ie
Tunerokk said:
(kind of appointed by husband)
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This sounds very vague.
Tunerokk said:
Husband also owns a house (not wife) for renting out.

Money from rent coming to husband's account.
Click to expand...
Surely that makes it his income?
 
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(kind of appointed by husband) - that means that there is no former agreement between me and my wife that she acts like a landlord. We just agreed that she will keep an eye on that renting property, incl tenants agreement, PRTB, issues in the house, etc. We are a happy family, loving each other, so it doesn't matter for us who gets the money in our family and to whose account it goes. Yes , formally it goes to my account. So would it be wiser , for tax purposes, that rental money should go to wife's account? Also, would it be enough to change ownership to joint names and let the rent become wife's income, fully wife's, not 50/50 ?
 
I wrote to Revenue to get confirmation on when you jointly own a property and are also jointly assessed could you split the rental income in a way that suited best or did it have to be 50:50.

The exact reply was as follows..
‘Through joint assessment,rental income may be allocated between spouses on the form 11 in a way which is most beneficial to the taxpayer.Therefore is not required to be split evenly’
 
Thankyou Millie.
Would it be quicker and cheaper to change my ownership of rented property to joint names or to my wife's name ?
 
The logic for Revenue’s treatment is that property can be transferred tax free between spouses at any time.

It would be absurd for Revenue to insist that spouses actually go through with the transfer (with associated conveyancing costs) to get the beneficial tax treatment.

Substance over form is what matters here.
 
No need to make her even a partial owner?
Is there a need to make rental money go to her account, not to mine? We are jointly assessed.
 
If you are jointly assessed, then Revenue treat all investment income as yours, to be allocated as you wish.

After all, the assets generating the income can be transfered at will
 
Hope so. It'll be grand, :) typical Irish, all is easy going here :). Germany for example wouldn't allow that way.
 
Does this applied also if the 2 spouses are registered as landlords for the rtb?
 
I would think so. For RTB landlords who register there are not necessarily owners of renting properties, I know that for sure.
 
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