My father died in 2014, and I used some of my inheritance to purchase a property in the names of my two adult daughters - one-third each. They are owners in name, but have no input into the property. I have all dealings with the rental of the property and monies are paid into mine and my husband’s joint account (my husband owns remaining one-third of the property). As I manage the property and they do not receive any money from the rental, how do we stand tax–wise? As the rental is my 'job', am I right in assuming that the money will be taken from my tax allowance? What implications are there for my daughters, as they do not benefit from the property financially?

Arthur Weller replies:
If you look at www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9310 you can see that for rental income the legislation says that the person liable to income tax is the person receiving or entitled to the income. But the conclusion on that page is that ‘entitled to receive’ is the most important criteria. However, if you look at the next page (TSEM9320) you can see that the ‘settlements’ legislation says that if there is an arrangement whereby the settlor (i.e. basically the person who provided the funds originally to acquire the property) can benefit from the property and/or its income, then the settlor is taxed on the income. From what you have described it would appear that you should be taxed on the rental income.