Gransnet forums

Legal, pensions and money

Rental income

(34 Posts)
Readandcook Sun 04-May-25 14:14:20

That the rental income generated on these properties goes into various accounts.
As I mentioned I do not receive the money- it is held in bank accounts and the rentals go back 20 years plus so there is a fair bit in these accounts.

Norah Sun 04-May-25 13:28:10

I'm not understanding.

Perhaps the asset was properly transfered to your names but the income was reserved, with your parents continuing to receive the income?

We've given rental homes to our children and grandchildren. They now receive the income as they own the properties.

Maybe ask your parents who earns the income and pays the taxes.

Silverbrooks Sun 04-May-25 12:44:12

I'm still unclear although it sounds the same as what I said before only one generation back.

Your parents have transferred the properties into the names of their four children (including you) but have retained the right to the income. Is that it?

If so, as I said above, there are CGT implications (on the transfer of the assets) and IHT implications if these were "gifts with reservation of benefit".

If your parents have retained the right to the income, I hope they have been declaring it else they could be in serious trouble with HMRC over tax evasion.

growstuff Sun 04-May-25 12:35:59

Are you saying that your parents have held on to the rental income?

David is correct that there is probably some kind of trust. As Silverbrooks wrote, you really need to see a tax accountant to clarify the situation.

My own children have rental property which was gifted to them by their grandmother when they were 18. All taxes were paid at the time and tax continues to be paid on the rental income, but the residual income goes to my children and they own the properties outright.

OldFrill Sun 04-May-25 12:32:35

Readandcook

Sorry when I mention children I am meaning myself and my 3 siblings.
I do not wish to create a family feud but I do not see it as fair.

Silverbrooks gives sound advice.

What is it that you don't see as fair?

David49 Sun 04-May-25 12:24:38

You do need to clarify this situation you have been told it’s been transferred to you, that may or may not have happened, the tax rules around rental properties is complex.

Most likely some kind of trust is involved.

Readandcook Sun 04-May-25 12:17:46

Sorry when I mention children I am meaning myself and my 3 siblings.
I do not wish to create a family feud but I do not see it as fair.

Silverbrooks Sun 04-May-25 11:45:26

I assume you have paid any capital gains tax arising on the assets transferred to children.

Transferring assets to children while retaining the right to continue receiving the income, known as a "gift with reservation of benefit," has tax implications. While it may seem like a way to reduce inheritance tax (hence your mention of seven years), it can also cause the property to remain part of the donor's estate and be fully taxed upon their death.

Whether you draw on the rental income is irrevelant. If you could draw on it then it’s taxable.

You need to see a tax accountant.

Readandcook Sun 04-May-25 11:18:05

Myself and my 3 siblings all have a quarter share in 10 rental properties due to my parents working very hard and buying various properties years ago.
All the properties are long let and transferred into the children’s names mostly over 7 years ago to save on tax.
My issue is that I have never received any income directly to myself. The rentals all go into various accounts and have never been transferred to us siblings.
We all work so don’t actually need the money although we are all looking to retire in the next couple of years.
Can anyone advise on the legalities of this situation please.