In 2005 I bought a BTL property in London with an outstanding mortgage of ~£150,000 and a current market value of ~ £500,000. The apartment has never been lived in by me and my name alone is on the title deeds and mortgage.
I would like to add my wife to the property, either 1) title and mortgage or 2) title only. We already own our primary residence together since 2012 which is unencumbered.
I have spoken with my bank and they are happy to add her subject to a standard application and some legal work.
I would like to get some clarification on the Stamp Duty Land Tax applicable in the event of adding her to the deeds and mortgage.
I have spoken to an accountant and a number of solicitors/conveyancers about the transaction and specifically whether or not there is a SDLT liability.
With option 1, as the mortgage is ~£150,000 the "consideration" would be £75,000 as I am transferring half of the mortgage into her name. Therefore SDLT would apply to this. Ordinarily this would be below the threshold of £125,000 but believe as this would be an additional property, 3% would apply.
With option 2, what would the consideration be? Half of market value?
I have spoken to about 4 solicitors and only 1 has flagged that SDLT is likely payable as we already own a property together.
[Edit]
After posting this I have done further research which suggests SDLT isn't payable even if we own one property already: https://www.gov.uk/hmrc-internal-man...ual/sdltm09820
Is my assessment of option 1 with 3% liable correct? Is option 2 any better?
Assuming this is correct and I proceed with adding my wife, the obvious benefits are in the event of a sale as there would be an additional £11,700 CGT allowance as it would be in joint names. However the costs associated with option 1 or 2 are likely a little under £1,000 so the total outlay would be more than £3,000 which is quite a lot.
If I have my calculations correct, the additional CGT allowance as we are both higher rate tax payers would save us ~£3,200 in tax, so a net difference of zero between keeping it in my name and putting it in joint names.
Also, if it was held in joint names, how would we complete our self assessment? Is it typical to share the income and expenditure between the parties, assuming similar levels of personal income?
Thank you in advance
I would like to add my wife to the property, either 1) title and mortgage or 2) title only. We already own our primary residence together since 2012 which is unencumbered.
I have spoken with my bank and they are happy to add her subject to a standard application and some legal work.
I would like to get some clarification on the Stamp Duty Land Tax applicable in the event of adding her to the deeds and mortgage.
I have spoken to an accountant and a number of solicitors/conveyancers about the transaction and specifically whether or not there is a SDLT liability.
With option 1, as the mortgage is ~£150,000 the "consideration" would be £75,000 as I am transferring half of the mortgage into her name. Therefore SDLT would apply to this. Ordinarily this would be below the threshold of £125,000 but believe as this would be an additional property, 3% would apply.
With option 2, what would the consideration be? Half of market value?
I have spoken to about 4 solicitors and only 1 has flagged that SDLT is likely payable as we already own a property together.
[Edit]
After posting this I have done further research which suggests SDLT isn't payable even if we own one property already: https://www.gov.uk/hmrc-internal-man...ual/sdltm09820
Is my assessment of option 1 with 3% liable correct? Is option 2 any better?
Assuming this is correct and I proceed with adding my wife, the obvious benefits are in the event of a sale as there would be an additional £11,700 CGT allowance as it would be in joint names. However the costs associated with option 1 or 2 are likely a little under £1,000 so the total outlay would be more than £3,000 which is quite a lot.
If I have my calculations correct, the additional CGT allowance as we are both higher rate tax payers would save us ~£3,200 in tax, so a net difference of zero between keeping it in my name and putting it in joint names.
Also, if it was held in joint names, how would we complete our self assessment? Is it typical to share the income and expenditure between the parties, assuming similar levels of personal income?
Thank you in advance
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