Transferring ownership

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    Transferring ownership

    Hi,
    I'd appreciate some advice.
    The property was bought jointly by my husband and me in 1995 and we lived there for 10 years before remortgaging in my sole name to BTL in 2005. In order to minimise the CGT liability when we sell, I would like to add my husband back to the title deed/mortgage. I spoke to the lender this morning (BM who underwent a number of changes since I took the mortgage out) and they informed me that I would need to find a broker and initiate the application through him/her as BM does not deal with customers directly any longer. She also implied it was a lengthy process as they would "have to do a thorough assessment of my husband's suitability".
    I am unsure whether going for a Deed of Trust instead would serve the same purpose. If we had a Deed drawn stating we owned the property 50-50, would that allow us to claim both sets of CGT allowances and PPRs? What would be the pros & cons of that?
    Also, I presume because we are married no CGT is due on ownership transfer. Am I correct?
    If we were to go for a Deed of Trust, would Title Deed change as well?
    Many thanks
    Aida

    #2
    The mortgage and title deeds don't have to match.
    There's no need to add your husband to the mortgage unless you want to.

    The tax liability follows the beneficial ownership not the title deeds.
    If your husband has been contributing to the mortgage, either directly or by paying other bills to allow you to pay the mortgage he will have a claim to beneficial ownership.
    An accountant will help get this in order - you shouldn't need to create a trust or mess about unless you have somehow ring fenced the property to exclude your husband.

    And if you've done that you will only be able to undo that from this point on, it can't be retrospective.
    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
      A DoT could involve the loss of some tax relief for the mortgage interest in these circumstances.

      I suggest you consult with your accountant and solicitor about the implications - both tax and financial.

      Comment


        #4
        What was the value of the property in 1995 and what is the approx. value of it now?

        Comment


          #5
          Thanks all.

          We bought it for £72,000 in August 1995. Started letting it out in March 2005. It is now worth 450 - 500,000.
          We had several capital investments since (lease extension, double glazing, bathroom renovation) amounting to £50,000.
          Any idea of CGT due if both our CGT allowances and PPRs are applied would be appreciated.
          Thanks

          Comment


            #6
            Wow, that is a huge leap. I think you need to wait for one of the regulars in the tax section to give you an idea. Alternatively, I can pm you the details of my accountant who specialises in property - he is very good.


            Have you looked at this posting: http://www.landlordzone.co.uk/forums...sell-my-rental

            Comment


              #7
              Who's been claiming the mortgage interest relief against the rental income since 2005?
              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


                #8
                The mortgage comes out of my account and the rent is paid into the same account. I claimed interest relief and paid tax on rental income.

                Not sure if relevant, but loads of bills (lease extension premium, double glazing) were paid either from a joint account or my husband's personal account.

                Comment


                  #9
                  With the size of the increase, professional advice is worth it.

                  I don't know how much of the growth was between 1995 and 2005, but the PPR for that seems to be the main prize.
                  I don't know how your husbands half would be treated if you sell as lone owner (does his half of the PPR get lost?) in which case you want him back as owner when you sell.

                  Two allowances is nice, but not as nice as 25% of £400,000.
                  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


                    #10
                    jpkeates,

                    We'll definitely seek professional advice.
                    Many thanks for your time

                    Comment

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