I have a new client who receives rental income into her bank account but have found out her father owns the property. Surely this should be taxed in his name and he is gifting his daughter the money? Apparently, they have done this for years and don't see a problem with it.

Arthur Weller replies:
Unless there is a valid declaration of trust (see HMRC’s Trusts, Settlements and Estates manual at www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estatesmanual/tsem9922) or some other sufficient proof that the daughter is the beneficial owner of the property, then you are correct that this rental income is the father's; he is liable to tax on it (see www.gov.uk/hmrc-internalmanuals/trusts-settlements-and-estates-manual/tsem9160) and he is gifting the daughter the money.