Inheritance Tax and Holiday Lets

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jilt
jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
Hi there, I know this may be the wrong forum to ask in but is anyone particularly hot on Inheritance tax and/or holiday lets?

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  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
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    Why is it that HMRC will never committ to anything. have just called them to ask if 3 people jointly own some furnished holiday lets, as they are not spouses should the income be split equally or can they decide the split themselves?

    Wouldn't commit to a yes or no just said 'well they have to show how the income is distributed' so again I ask can they decide on the split themselves, or does it have to be split equally, or should the split reflect how the properties were purchased ie how much capital each one of them put it. Still wouldn't give me a straight answer.

    Next I asked if it was possible for a limited company to own holiday lets, repy 'I'll have to get an inspector to call you but they don't like answering hyperthectical questions'! :cursing:
  • JodieR
    JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
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    I've not got dealt with anything exactly the same as your situation, but I did the tax returns a few years ago for a woman and her son who owned a couple of properties together. The idea was that he would receive the rental income while he was at uni, then for the next few years they'd split it between them and then when she retired she would receive all the income.
    I found some info in Tolleys tax guide - 32.3 if you've not got it, part of it reads '...although normally shares of rental income are equal to the respective shares of ownership of the property, the joint owners may agree to share the income differently. Their taxable share would be the share actually agreed. It would be sensible to have written evidence of any such arrangements.' it also points to HMRC's Proprty Income Manual PIM1030.
    I don't know how much of these rules apply to holiday lets, but would guess it would be the same rules.

    Jodie
  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
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    Ah thanks Jodie, I actually found the same wording in HMRC PIM1030 on the website after a lot of searching, and I've just checked Tolleys and yes its in there at 32.4 in my 09-10 edition but I missed it :blushing:

    Thanks again
    Jill
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