Hello,
This started out as a simple question, however on investigation there are implications I had not considered.
I do hope you can provide some guidance and appreciate professional services are a must.
But as a prelude to consulting a solicitor/accountant I would like to work through my thinking with you all.
First my situation,
Wife and I are joint tenants for a property we currently let. Two years ago the property was our principle residence for the preceding 12 years and since then has a BTL mortgage in both names.
Rental income is equal to 15K per year before expenses.
Wife does not work and has no use of her income tax allowance, I work and pay 40%.
Considering I trust her with my life and assets and see no issue with changing the beneficial owner for income in the property so she can take advance of her income tax allowance.
Objective: Maintain legal ownership between us - Wife and I remain registered owners with Land Registry and distribute the income such that it is all or as near as, received by wife for income tax purposes.
Am I missing a step....?
Change Beneficial Ownership in favour of wife - Requires the following?
1) Solicitor to create a Deed of Trust - Share proportions to be decided? - 100/0% or 99/1% subject to answers to questions below.
2) Change from Joint Tenants to Tenants in Common - Apply for a Form A Restriction (Submit SEV Form to Land Registry)
3) Declare Beneficial interest in property and income to HMRC (Submit Form 17 to HMRC)
Questions:
A) Does Form 17 declaration to HMRC need to specify and match the proportional shares defined in the DOT?
B) Can I split the share 100/0% and have both names registered as tenants in common?
C) If we specify a 100/0% DOT split and declare this to HMRC, what of the following:
D) Implication for mortgage provider, current mortgage and future re-mortgage in BOTH names (as now tenants in common)
E) Private Residence Relief - If we come to sell, I will no longer have any beneficial interest in the property, will the chargeable gain still exclude the time for which my wife (and possibility myself?) lived in the property and the following 18 months?
F) Letting Relief - Would any subsequent chargeable gain still qualify for lettings relief?
G) CGT - Only my wife will be able to use her GCT allowance on the remaining gain?
Thanks in advanced for the wisdom and wit I prepare to receive!
Meta
This started out as a simple question, however on investigation there are implications I had not considered.
I do hope you can provide some guidance and appreciate professional services are a must.
But as a prelude to consulting a solicitor/accountant I would like to work through my thinking with you all.
First my situation,
Wife and I are joint tenants for a property we currently let. Two years ago the property was our principle residence for the preceding 12 years and since then has a BTL mortgage in both names.
Rental income is equal to 15K per year before expenses.
Wife does not work and has no use of her income tax allowance, I work and pay 40%.
Considering I trust her with my life and assets and see no issue with changing the beneficial owner for income in the property so she can take advance of her income tax allowance.
Objective: Maintain legal ownership between us - Wife and I remain registered owners with Land Registry and distribute the income such that it is all or as near as, received by wife for income tax purposes.
Am I missing a step....?
Change Beneficial Ownership in favour of wife - Requires the following?
1) Solicitor to create a Deed of Trust - Share proportions to be decided? - 100/0% or 99/1% subject to answers to questions below.
2) Change from Joint Tenants to Tenants in Common - Apply for a Form A Restriction (Submit SEV Form to Land Registry)
3) Declare Beneficial interest in property and income to HMRC (Submit Form 17 to HMRC)
Questions:
A) Does Form 17 declaration to HMRC need to specify and match the proportional shares defined in the DOT?
B) Can I split the share 100/0% and have both names registered as tenants in common?
C) If we specify a 100/0% DOT split and declare this to HMRC, what of the following:
D) Implication for mortgage provider, current mortgage and future re-mortgage in BOTH names (as now tenants in common)
E) Private Residence Relief - If we come to sell, I will no longer have any beneficial interest in the property, will the chargeable gain still exclude the time for which my wife (and possibility myself?) lived in the property and the following 18 months?
F) Letting Relief - Would any subsequent chargeable gain still qualify for lettings relief?
G) CGT - Only my wife will be able to use her GCT allowance on the remaining gain?
Thanks in advanced for the wisdom and wit I prepare to receive!
Meta
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