Uneven rental income split - sole proprietor

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    Uneven rental income split - sole proprietor

    So this question is related to a similar topic (https://forums.landlordzone.co.uk/fo...l-income-split)

    If a rental only has a sole legal owner (bought before marriage) how do I add a spouse to it? HMRC Form 17 talks about "joint ownership"? Do I need a Decl. of Trust?

    thanks

    #2
    Is the property mortgaged?
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Yes there is approx 95K left.

      Comment


        #4
        You'll almost certainly have to put your wife on the mortgage, so she will be "paying" half the mortgage value to acquire the property.
        Which means that SDLT will be payable because it's a second property.

        It's theoretically possible for the lender to consent to the change in ownership, but I'd be astonished if they did.

        Once you both own the property as tenants in common, you need a deed of trust (confirmed to HMRC with "form 17") to change the precentages ownership.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          If you can reduce the outstanding mortgage to below £79 K before transfer to wife , you will be gifting a half share to wife at under £40K and she may escape paying the sdlt.

          Comment


            #6
            Originally posted by jpkeates View Post
            You'll almost certainly have to put your wife on the mortgage, so she will be "paying" half the mortgage value to acquire the property.
            Which means that SDLT will be payable because it's a second property.

            It's theoretically possible for the lender to consent to the change in ownership, but I'd be astonished if they did.

            Once you both own the property as tenants in common, you need a deed of trust (confirmed to HMRC with "form 17") to change the precentages ownership.
            It's very common for mortgage companies to allow a change in ownership in this way. For a small fee of course. There charge on the property doesn't alter and they have an extra body to chase for payment, no-brainer really.

            Comment


              #7
              Originally posted by Gordon999 View Post
              If you can reduce the outstanding mortgage to below £79 K before transfer to wife , you will be gifting a half share to wife at under £40K and she may escape paying the sdlt.
              You'll be gifting her nothing, you'll be charging her 50% of the mortgage.

              Comment


                #8
                Originally posted by Kape65 View Post
                It's very common for mortgage companies to allow a change in ownership in this way. For a small fee of course. There charge on the property doesn't alter and they have an extra body to chase for payment, no-brainer really.
                If you mean a change in ownership accompanied by the wife joining the mortgage, yes I agree, provided the wife is credit worthy).

                My point about the lender not allowing the change was addressing the possibility that the lender would allow a change to joint title without changing the mortgage.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  Thank you all for your prompt replies.

                  If I understand correctly, I need to get her "name on the mortgage" in addition to mine, and that we should be prepared to pay SDLT.

                  - Who will tell me if I need to pay SDLT? The current lender? Sorry being thick here.

                  - Does adding the wife on the mortgage somehow change the "legal ownership" status in Land Registry. This is the part I am confused about.

                  Comment


                    #10
                    You need a solicitor/conveyancer to change the title - they will also deal with the SDLT.
                    However, you should first check that your lender is OK with the issue and possibly pay down some of the loan (as per Gordon999) to get the gift below the threshold for SDLT.

                    It's worthwhile working everything out in advance, because you might find that the cost(s) of making the change outweigh any tax savings.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment


                      #11
                      jpkeates Agreed, will check with lender first. Unfortunately I can't afford the pay down :-/

                      Comment

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