In a sign of how complex tax laws can be for landlords, the Defence Secretary Philip Hammond has been forced to explain why a buy to let property owned in his name has now been transferred to his wife's name.
He claims it is not a ruse to avoid paying the highest rate of tax although he admits that a Daily Mirror story claiming the transfer took place two years ago is accurate.
The newspaper claims this transfer helps keep him out of the highest rate of tax, levied those who earn over £150,000 per year. Hammond's salary as a Cabinet minister is £134,565 but the rental income may have tipped him over the higher threshold.
Hammond says: "The distribution of property assets within a marriage is a private matter. However, the suggestion that the gift of my share in this property to my wife was designed to avoid the 50 per cent tax rate on rental income is incorrect: in 2012-13 my only significant income was my ministerial and parliamentary salary.
Agents have for many years stressed the need for individual landlords to always seek professional advice in terms of accounts and tax payments.
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Comments
It gets me how these none stories get in the media. If he didn't transfer this property into his wife's name he would be a fool and unfit for office as a minister of the realm.