Rental income - tax return question

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errigal

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I am currently preparing my personal tax return for 2007. Form 11

My wife and I are taxed separately at present so we will both be completing separate forms.

With regard to a property we jointly own which we accrued rental income from in 2007, what dictates whose tax return the rental income should be documented on. Can i put it all through mine, or should the income (and indeed relevant expenses) be halved and split across both?

As it happens, the answer has no financial impact as we both are paying tax at the top rate.

TIA
 
Hi Errigal,

If the property is jointly owned by you both then you need to split the rental income, expenses and capital allowances 50:50.

Jockey
 
We split it 50-50, but only because I am on the lower rate of tax and my husband is on the higher rate.
 
I assume you mean separate treatment when you say taxed separately as opposed to separately assessed. Can I ask why on earth would you opt for that type of taxation?

Also you've accrued rental income? Case V rental income is treated on a receivable basis. (I.e. If you own one property and the rental payments are monthly then you will have 12 payments of rental income.) I assume you treated the rent on this basis when you say accrued?
 
We got married in 07, so actually not sure how it works (taxed separately or jointly) - thought it was separately but not well versed on these things.

Yes, excuse my terminology again on the 2nd point
 
Ur terminology was fine!

On the first point, you will more than likely be entitled to extra relief known as 'year of marriage relief'. It depends on how your income is split, you might consider proper professional advice as this can sometimes result in significant savings.
 
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