Help - Transferring equity to spouse. SDLT is it applicable & sharing income tax?

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    Help - Transferring equity to spouse. SDLT is it applicable & sharing income tax?

    I'm in a bit of a mess and after some advice:
    I have a rental property that is currently in my name and I'm a 40% tax payer.
    My wife is currently not working and as a result not using any tax free allowance. I'm keen to share the income to reduce the tax burden.
    The property is worth £240k
    I was going to get a solicitor to transfer the property into joint names but under the new stamp duty rules, I'm still unclear if my wife will need to pay stamp duty on the share she takes as it she already has a home?
    My calculations tell me that if she has 50% then although her £120k share will be under the stamp duty threshold, as its a second home she will have to pay 3% on this (£3600). Is this correct?
    I've also heard that no matter what the ownership % split is, the tax liability will be 50% for married couples? So if stamp duty is applicable, can I give her just 1% of the property so I only pay stamp duty on a much smaller portion and yet still split the tax liability 50:50?
    Or is there an even better way to reduce the tax liability even more by putting more into her name?
    I'm going round in circles a bit and am due to remortgage next week so am hoping to sort it all out at the same time.
    I guess my questions are:
    Is stamp duty applicable? Hows best for me to reduce the income tax burden as I'm trying to reduce the current tax load if there's a better way and looking forwards, how best to split things to reduce the CGT hit if we sold up at some point?
    Any good advice appreciated as I'm a bit of a novice at this.
    Thanks
    Ross

    #2
    The mortgage on the property needs to be sorted out.
    If the mortgage is in your name, the lender is not going to allow you to dispose of part of the property that secures it.
    So your wife may need to part of the mortgage.

    Sit down with an accountant or a solicitor that specialises in property or family tax.
    You can achieve what you want using a trust, which would also avoid the issue of SDLT (which will arise because of the mortgage, normally the gift would not attract SDLT).
    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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      #3
      Thanks yep I'm planning to put my wife on the new mortgage as well for the BTL and transfer the ownership at the same time.
      Are there any good / reasonably priced online services for this kind of advice?

      Comment


        #4
        You need to talk to someone who can get an overview of your position.
        A local solicitor or accountant will do this kind of thing regularly.
        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


          #5
          To be definite in your planning I would definitely suggest you talk to a very competent solicitor or tax accountant

          Comment


            #6
            Consult your own mortgage lender first to check if joint name is acceptable for mortgage loan . If not, you may have to look for another willing mortgage lender

            Comment


              #7
              Originally posted by loanarranger View Post
              To be definite in your planning I would definitely suggest you talk to a very competent solicitor or tax accountant
              Absolutely the way to go. You need advice tailored to your finances and what you hope to achieve. You cannot get that by ticking boxes online.

              Comment

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