My wife and I own jointly three buy-to-let flats. There is a small mortgage on each of them and so far the rental income was shared equally between us. Since my wife, a UK resident, has a salary in the high tax bracket, the tax on her rental income is 40%. I am non-UK resident and my rental received comes within the £10,000 allowance.  In order to reduce her tax bill can we make an agreement that rental will be paid to me at say 99% and 1% to my wife?  We have a joint account and my wife has also her own account.

In order to be taxed 99:1 it will be necessary to change the actual ownership of the jointly owned properties so that you own 99% of the properties and your wife owns 1% of the properties. Furthermore, within 60 days of doing so, you need to inform HMRC on Form 17. These rules can be seen on www.hmrc.gov.uk/manuals/tsemmanual/TSEM9842.htm and subsequent pages. A simple agreement between you and your wife about allocation of the rent is not sufficient.