Transfer of mortgage on by to let propertys after 1st April

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    Transfer of mortgage on by to let propertys after 1st April

    If a husband and wife jointly own a buy to let property with both their names on the mortgage, say they wanted to transfer the mortgage solely into just the wives name, would I be correct in saying the half of the mortgage transferred over would be liable to the SDLT rates for a second home?

    For example, if the mortgage was £110,000, then half of that = £55,000 is taxable @ 3%, = £1650...

    How does this help free up property for first time buyers?

    #2
    No - transfers between spouses as gifts are free of both CGT and SDLT.
    And in any event mortgages and ownership are not the same thing.
    Read all other threads about Form 17 notification.

    But you are correct the new stamp duty rules are not there to benefit first time buyers -- they are there to benefit corporations and generally to irritate the taxpaying population.

    The final rules are not there but I doubt that transactions that were never subject to stamp duty at all (like gifts) will be subject to 3% if the recipient is already an owner.

    Comment


      #3
      I'd talk to an accountant about the consequences of being joint title holders and having the mortgage only in one spouse's name.
      That can get a bit messy if things go wrong in future.
      And it could be very costly if either of you or both had ever lived in the property.

      Mr Dod is right in answer to your actual question.
      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


        #4
        The way I understand it, our BTL mortgage, has a joint and several liability. That is we both individually are liable for the whole amount. And yet through a Declaration of Trust, she owns 90% interest and I own a 10% interest. And this will allow my wife to take full advantage of her low tax paying status.

        No need to change any mortgages if both names are on mortgage.

        Comment


          #5
          SDLT is payable when there is a change of ownership in property, which has to be registered at Land Registry.

          SDLT is not charged for any changes to the mortgage borrower.

          Transfers in % share of property already jointly owned by husband and wife can be done by Declaration of Trust and this change need not be registered at Land Registry.

          Its best to keep both names as mortgage borrower in case you want to restore the previous % ownership before putting the property up for sale.

          Comment


            #6
            Originally posted by Logical.Lean View Post
            The way I understand it, our BTL mortgage, has a joint and several liability. That is we both individually are liable for the whole amount. And yet through a Declaration of Trust, she owns 90% interest and I own a 10% interest. And this will allow my wife to take full advantage of her low tax paying status.
            Yes that is correct. Although if you are trying yo imply that the "joint and several liability" on the mortgage account means that you each a) pay 50% of the mortgage interest an b) if you get divorced 50% of the ownership will be counted against you, then that is not correct.

            You cannot declare 90% of the income against your partner, and 50% of the interest against your 10% income.

            Just to clarify one point Gordon made -- SDLT would not be payable on a gift transfer which is a between husband and wife (or indeed any other person) regardless of whether it needs to be registered at Land Registry. AFAIK, if you gifted a property owned entirely in your name to your spouse (or indeed anyone else), and this transfer was in the nature of a gift without monetary or any other consideration, LR names would change completely but no SDLT would be payable. CGT would however be payable if not a spouse.

            Comment


              #7
              Originally posted by AndrewDod View Post
              But you are correct the new stamp duty rules are not there to benefit first time buyers -- they are there to benefit corporations and generally to irritate the taxpaying population.
              People with just a single property, or none yet, are not likely to be irritated by this.

              I don't even find myself that irritated by it... assuming I can get my last purchase in quick-sharp.

              Comment


                #8
                AndrewDod,

                I was assuming that when we eventually do our self assessments, I'll "take" 10% of all costs including 10% of mortgage interest and 10% of the rent, and she'll take 90%.

                I'm not so worried about divorce. We've been married 26 years. I don't think it's on the cards at the moment, but hey life can throw curved balls at times. I guess that it does not matter whose name is on what. I guess that my 100% of a ltd company would be chopped to 50% and 50% of my pension would be hers and 50% of her pension would be mine. And she'd get my welder and I'd get her food processor.

                Comment

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