Tax for joint owners

[Andrew3096]

Hello,

I’m currently looking at setting up an Airbnb over a long term let and just exploring the tax scenarios. 

I see a bit of mixed information online and some accountants have advised me differently whose is annoying as I thought this would be fact and not a grey area. 

Me and my wife both own the property jointly but I want to declare the income in my name only as lower tax bracket. I thought this was ok with air bnb? 

Any advice much appreciated.

Anyone know a good accountant? U.K. based. 

[Mike-And-Jane0 · Accepted solution]

@Andrew3096 If you qualify to be a Furnished Holiday Let you should be able to declare up to 100% of the income to one spouse. Also earnings are also pensionable neither of which is true for longer term lets. There are strict rules though to qualify so you should search FHL on gov.uk

[Andrew3096]

Thank Mike that’s great. I’d did see the FHL criteria for Wales, which is strict. Am I right in thinking that you won’t know-if you’ve qualified for a FHL until the end of the tax year as a lot of it will depend on whether you’ve been booked out for the specified number of days to meet the criteria? 

[Mike-And-Jane0]

@Andrew3096 Be careful as I think you may be confusing two different things (but I am no expert on Welsh devolution).

For council tax/business rates in England you need to be available for 140 days and actually rented for 70. in Wales these figures are 252 and 182 respectively. Failure to achieve these figures allow Welsh councils to triple the council tax on second homes. Achieving this figures put you into a business rates regime and a lot of properties pay nothing as they get small business rates relief.

For income tax though I believe the rules are the same in England and Wales (but I could be wrong). If so then you need to be available for 210 days per year and actually let for 105 days. There are other rules like no booking can exceed 30 days but the 105 days rule is the one you need to achieve.

The test is done over the 12 months period from when you start letting and then over the period 6th April to 5th April.

[Andrew3096]

Thank you Mike that’s really helpful!