Non-spouse Partner Income - delete?

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From: Andrew Christie


Dear All/Ian

I have a couple of IP's held jointly with another party + others in my name only.

When setting up a portfolio with these mixed properties, PIA also calculates the partner's share of expenses/rent etc.. plus at times a negative/positive income stream for the partner. This 'income' appears to be reflected in the reports 'tax benefits / investment capacity...

This is distorting, I believe, the presented outcome and possibly the investment analysis spreadsheet (re tax credits?).

Is it safe/ok to delete all the partner entries in the income area ? (menu path: investor > current income). Is this 'partner' income/expenses used anywhere else in the report?

The partner income also appears in the 'tax credits' section.. does this figure come from the current income section?

Or should I just delete the partner income from the tax credits section?

regards

AndyC
 
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From: Webmaster (Somersoft)


Firstly it is important to understand how the incomes of the investor and partner are used in the PIA program.

The first and most important use is in calculating the tax credits associated with any investment. Assuming the user has chosen to use taxable income as the means for calculating tax credits, only the investors income will be used if the property is in the one name only. If it specified as joint names, obviously both taxable incomes are used.

The other main use of having specified incomes is in the program's ability to calculate your collective investment capacity. In this case the income of both the investor and partner are used in the collation of all income and expenditure, including that of the property(s). The logical extension of this is in the Wealth Builder where both incomes are used as well. This does not mean though, that both incomes are use to calculate tax credits if the property is in a single name.

The portfolio analysis is a little different. If you have a collection of properties, some of which are held jointly, some in the investor's name only, the program first of all collates the accumulated pretax cash flows by apportioning all the income and expenditure from each property in the portfolio according to your original specification. To complete the cash flow analysis from this point, it must calculate tax credits based on the taxable incomes shown in the current active spreadsheet. However, the question PIA is faced with is whether the tax credit should be based on single or joint names. Currently, the program makes the assumption that it is on a single name if ALL properties were in a single name, otherwise it will calculate the tax credits based on joint names (as shown in the spreadsheet in the report it generates).
 
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