Mr & Mrs Balance
Meet Mr. & Mrs. Balance, the dynamic duo fully employed and astutely investing in buy-to-let properties. Their joint endeavour in the property market complements their PAYE income, showcasing their financial acumen. With a clear understanding of the benefits of collaborative investment, they skilfully allocate property income to make the most of their combined tax allowances. CJC Accountancy is instrumental in their strategy, ensuring they leverage the most favourable tax positions by utilising the lower earners tax band, thereby optimising overall tax savings on their investment returns.
Harmonising PAYE and Property Investment
For married couples or civil partners like Mr. & Mrs. Balance, who jointly own rental property, leveraging the lower tax band of one partner can be a smart move. If one spouse is a lower rate taxpayer, the couple can benefit from allocating a larger portion of the property income to them. To formalise this arrangement, it’s necessary to file Form 17 with HMRC, accompanied by a declaration of the income split supported by a deed of trust. This legal document specifies the new income shares and must be submitted within 60 days. Proper utilisation of Form 17 allows couples to take full advantage of their differing tax bands, potentially leading to significant tax efficiencies.