co tenants and rent

[fernfurn]

If I buy a house and put my kids and I as co-tenants, and I only receive the rent, which I pay tax on, would my kids have to pay tax on that rent. In other words, would I have to pay them a portion of the rent.

 

[Terry_w]

If I buy a house and put my kids and I as co-tenants, and I only receive the rent, which I pay tax on, would my kids have to pay tax on that rent. In other words, would I have to pay them a portion of the rent.

Yes. Owners would receive income in proportion to ownership.

 

[fernfurn]

But surely if all the rent is in my name, they have not earned anything therefore wouldnt have to pay tax

 

[marg4000]

Any lease will list the owner(s) of the property which will include your children's names.

Legal advice seems advisable as I am not sure how minors can sign a contract to buy.

You can buy as either joint owners or tenants in common.
Marg

 

[Rob G.]

Assuming you can establish joint ownership exists ...

Co-owners share income from property in proportion to ownership interest.

Children under 18 years at 30 June (minors) would normally be taxed at punitive rates on their share of passive income.

 

[fernfurn]

all children are adults so rent would be added to their income, but so would a proportion of the deductions. I was trying to protect assets, but I dont want to increase their tax

 

[fernfurn]

All kids are adults. Income would be added to their income but they would be able to claim percentage of deductions. I was tryingto protect assets, but dont want to increasetheir tax

 

[Terry_w]

But surely if all the rent is in my name, they have not earned anything therefore wouldnt have to pay tax

Similar to if you had your wage deposited into a spouses account. It is still your wage.

 

[Paul@PFI]

all children are adults so rent would be added to their income, but so would a proportion of the deductions. I was trying to protect assets, but I dont want to increase their tax

Speak to a lawyer if that is your aim.