I would like to receive my rental income for an annex attached to my property through a limited company (set up for this purpose). I do not want to transfer ownership to the company. I wondered if this is ok or whether HMRC would want the income taxed personally as I own the property?

Arthur Weller replies:
It is not possible to transfer an ‘income stream’ to another party. If two parties are joint owners of a property, they can potentially decide between them that one party will receive more than ‘their fair share’ of the rental income, and be taxed accordingly. See HMRC’s Property Income manual at PIM1030. But without at least a partial ownership in the property, this is not possible. Alternatively, you may want to consider the strategy of renting out your property to the company for a small rental figure, and the company sub-letting the property to the actual tenant for a much higher rent.