Another Form 17 Question. Avoiding 60% TAX

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    #17
    I'm aware of beneficial ownership but how do you gift say 1% of the title?.Every document I've ever come across to register or transfer title only assumes an equal share.

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      #18
      The situation is different when the change is from Mr A owning a property on their own and giving a small part of it to Mrs A, as opposed to a property already owned jointly by Mr and Mrs A who want a new tenancy in common with defined shares of ownership.

      In the former case a conveyancer changes the title to be a tenancy in common with unequal shares and Mr A gifts 1% of the title to Mrs A and if there's consideration (Mrs A joins a mortgage at the same time) SDLT is due on the 1%.

      In the latter case, Mrs A is massively losing out. She starts owning a property (shared with her spouse, but they both own all of it) and ends up owning a tiny specified share of it.
      So Mrs A is gifting a lot to Mr A, and if there's a mortgage, it's probably 49% of it for tax purposes (I don't know if this ever really happens, it's so daft an idea).

      So you would "normally", in that case make the split 50:50, as for tax purposes, there's no consideration.
      And then use a trust to vary the beneficial ownership.
      Which is why I suspect it's worked like that in all the examples.
      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).

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        #19
        Originally posted by jpkeates View Post
        In the former case a conveyancer changes the title to be a tenancy in common with unequal shares and Mr A gifts 1% of the title to Mrs A and if there's consideration (Mrs A joins a mortgage at the same time) SDLT is due on the 1%.
        This is the part that I have problems with. I'm not saying it isn't possible, I believe it is but I can find no registration document that allows you to specify tenants in common in unequal shares only ones that assume equal ownership. There has to be an official transfer document somewhere otherwise what does a conveyancer use? I'm aware of form JO but is this not the same as beneficial ownership?

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          #20
          Originally posted by Kape65 View Post
          This is the part that I have problems with. I'm not saying it isn't possible, I believe it is but I can find no registration document that allows you to specify tenants in common in unequal shares only ones that assume equal ownership.
          It's a fair point, and I have never actually done it, so I haven't any experience to share.
          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).

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            #21
            For registering unequal shares in property :


            https://www.gov.uk/joint-property-ownership

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              #22
              Aren't those documents just to sever joint ownership and create a tenants in common ownership?

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                #23
                Post 21 was intended to reply to your post 19. ( I can find no registration document that allows you to specify tenants in common in unequal shares only ones that assume equal ownership.)

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                  #24
                  Old thread I know, but one thing to bare in mind is rental income does not count as earned income for the purpose of pension contributions. So no tax credit if you put that money into pension.

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                    #25
                    Originally posted by Big_T View Post
                    Old thread I know, but one thing to bare in mind is rental income does not count as earned income for the purpose of pension contributions. So no tax credit if you put that money into pension.
                    Up to £3600 is allowed I believe.

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                      #26
                      Yes but if this whole post is about getting 40pct relief on 24k pension contribs made by wife after transferring 24k property income, that will not be possible. Only 20pct available (as she earned this 24 from job) , even though 40 pct tax paid on 14k of it.

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