Spouse to declare rental income

C

Cameo

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My spouse is earning way less than previously and her income has dropped marerially

Previously we were always separatetely assessed and i always declared rental income.

I believe it makes sense to make sure she declares the rental income on obe properry. Her total income should be around 35k after doing this. But i am assuming it's ok if we continue to be separately assessed

Reasons as i understand are

1. We'll pay lower USC and
2. Helps with maximising my wife's state pension, she has about 80 % of max entitlement currently

My questions are.

1. Is my thinking correct?
2. Does the property need to be transferred to her name, currently it's in ohr joint names
3. Anything else i am missing or should be thinkibg of?

Many thanks

Cameo
 
We bought a rental but specifically put it in my wife's name. She declares the rental income as hers for the reasons you outlined.

That worked for us.
 
Same situation as the OP, but we are joint assessment, I will be assigning all rental income to my spouse to pay lower usc
 
The rental income is assigned based on ownership of the property. If you own it 100% then you must declare it. It's your income. If it's owned 100% by your spouse, then they declare it. It's their income. If it's owned 50/50 etc, then you both declare your share depending on the percentage split.
 
Millie did you get that in writing? My accountant split everything jointly as that was the correct way to do it.
 
Millie* said:
I contacted Revenue directly on this.

My question was specifically if you are jointly assessed with rental income.

Their answer was if jointly assessed you can divide rental income as best suits your circumstances.
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Very interesting. My accountant said this was not possible. Seems like I need to do a bit more research on this.
 
Yes this is an interesting and not unusual situation and we'd all like the flexibility to declare the income in the name of the spouse that would deliver the lower tax bill in any given year - unless you want to pay more tax of course - for the sake of society (haha).

One agent I know succeeded in getting implicit agreement from Revenue that the income could be allocated to the spouse that has the "beneficial interest" in the income. Using that logic, it might be helpful to have the monies directed to a bank account solely in the name of your wife. It might be helpful if she is the person liable for LPT. It might be better if she is registered solely as the landlord with the RTB. If you are using an agent, the agent completes a Form 8-3, saying how much was collected for each person, stating the PPSN of the landlord. Ideally that would solely refer to your spouse. They're nice to haves.

As others have said, there's still a risk that an inspector could decide that it should be returned based on legal ownership.

There are other anomalies in different aspects of the tax legislation/application of the legislation when it comes to spouses and legal ownership of property. This includes CGT and mortgage interest relief.
 
Villaines said:
Yes this is an interesting and not unusual situation and we'd all like the flexibility to declare the income in the name of the spouse that would deliver the lower tax bill in any given year - unless you want to pay more tax of course - for the sake of society (haha).
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Thanks for the suggestions, i think I'll get my spouse registered with the rtb as the landlord for sure and potentially get the rent paid directly to her.

However, it does seem a bit daft that revenue dont just allow you optimìse tax when jointly assessed. In our case, it's one pot of money as such, so the transfers are all just window dressing really
 
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Joint assessed versus individual assessed I would have thought make little difference

If joint assessed the tax credits go into big pot and you will get the benefit

If separately assessed the spouse will keep her tax credits and get the rental income but overall the same result as joint assessed imho.

There must be income tax experts here who can tell us
 
Millie* said:
Yes Bronte
I can confirm I have it all in writing
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I decided to ask the same question but got the opposite answer! @Millie* maybe you could post the question that you asked and the answer that you got - it may be that it depends on the nuances of what is asked/what the situation is?

This was my question:
We have rental income from a property that is jointly owned. Are we required to split the profits and hence the tax on the profits of the rental 50:50 or can we vary the split to be advantageous to our income tax situation ie can my spouse, who has a lower income be assessed as having all the rental income? thank you

and this was the reply from My Enquiries on ROS:

Dear outofmymind,

for jointly assessed couples, rental income is split 50:50 unless the equity owned by each of you differs, such as 70:30. For your spouse to declare the higher profits, you would have to legally change the beneficial ownership structure and provide documents to verify same.
 
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Well now revenue have given two posters different advice. In writing. That's just brilliant.
 
OP what would be the cost and impact of putting the ownership in your wife's name? If not onerous/impactful in other ways, I would be inclined to do so and update all paperwork (like RTB, LPT etc) to her name. Then it is watertight - her asset generates her income. Assuming your work patterns/tax credit allocation will remain steady for a number of years. Revise the ownership as things change eg as you get close to retirement/if she returns to working outside the home etc.
 
outofmymind said:
I decided to ask the same question but got the opposite answer! @Millie* maybe you could post the question that you asked and the answer that you got
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@outofmymind

The question I asked in 2023 was as follows

‘’We are a jointly assessed married couple.

I am allowed to earn €49000 at 20% rate income tax and my husband is allowed €31000 at 20% income tax.Total €80000.

We currently own a rental property in joint names and divide this rental income 50:50 between us.

My question is:
Going forward, do we always have to split this in a 50:50 ratio or can we divide it up as best fits our standard rate cut off points.

I can take more of the rental income as I have the higher cut off point €49000.’’



Revenue replied 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’’
 
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