Deed of Trust for rental income

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    Deed of Trust for rental income

    Hi I purchased a property in 1990 for cash in my sole name for £30000. My wife myself and the children have lived there until 2010 when we shifted into another property. I then let the property and continue to do so. I work for a company for approx. salary of £36000/year and receive £8800/year rental income. I am considering putting the property in both names thro land registry and then make a deed of trust 100% -0% in favour of my wife receiving full rental income because she is a part time worker hence she pays no tax.
    What are the pitfalls of doing this?
    When we ever come to sell the property can we revert the deed of trust back to 50-50 and both get capital gains allowance?
    When we sell will we both be able to claim Private residence relief and Private letting relief or just me because the house was in my name when we were living there?
    Is there anything else we should be doing to minimise the tax that is being paid on this property?

    What is the capital gain if you sell now ?

    You have owned the property for 25 years and lived in it for 20 years so you would have to pay capital gains on the gain for last 3.5 years . You can claim exemption for PPR and Lettings relief. So probably no tax to pay.

    if you transfer 50% to wife , then in the event of sale , you may find that she cannot claim PPR or lettings relief on her half share of the capital gain. So you should seek advice from an accountant.


      You can only claim PPR and Letting Relief if you were a legal owner when you lived there. If you sold it in the next couple of years then probably no CGT but I would need the numbers and dates.
      If you did the transfer then there would be a CGT liability.
      You receive £8800/year rental income but how much profit do you have to declare. Regards Peter


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