Jointly Owned by married couple

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    Jointly Owned by married couple

    Hi, my husband and I own our investment property 50-50 tenants-in-common. No mortgage. We are Pensioners, each claiming a SRP and Occupational Pension.

    Can I fill in the Self-Assessment form with all the income and expenses in my name (as I will have to pay far less tax than him), or si this illegal. Thanks.

    #2
    Think I have found the answer in an old thread.

    Comment


      #3
      When the property is registered under "tenants in common" , you own a share in the property according to the percentage declared at purchase and you have the same percentage share of rental income ( and expenses) to be declared on your own tax return.

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        #4
        You can, however, alter the beneficial ownership through a Deed of Trust and then inform HMRC of the new split through form 17. This process would not be retrospective though.

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          #5
          Assuming at the moment, the property is under TIC 50/50 between husband and wife, with 200k mortgage. If Deed of Trust is done at 1/99, is it considered as a sale for SDLT and CGT? And when we change it from 1/99 back to 50/50 before actual sale, another Deed of Trust is needed, will it be another sale for tax purposes? Mortgage balance 200k unchanged.

          Will everything change if at actual sale with LR title transfered to 3rd party, mortgage balance is 0? Thanks.

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            #6
            The deed of trust is not a disposal for CGT or SDLT purposes.
            The split would be relevant if you actually sell the property to a third party (so CGT would be split along the beneficial ownership split).

            If you sell to a 3rd party it is an actual sale and CGT and SDLT (for the purchaser) will arise.
            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


              #7
              Originally posted by jpkeates View Post
              The deed of trust is not a disposal for CGT or SDLT purposes.
              The split would be relevant if you actually sell the property to a third party (so CGT would be split along the beneficial ownership split).

              If you sell to a 3rd party it is an actual sale and CGT and SDLT (for the purchaser) will arise.
              So the balance of mortgage for SDLT is only relevant when you add your partner's name on sole title deed and LR is notified of joint ownership?

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                #8
                If the property is held as tenants in common, the mortgage would have to accomodate that already - so it would have to be a joint mortgage.

                If you are a sole owner with a sole mortgage, the change is going to be a lot more complex (and the lender is likely to say no).
                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


                  #9
                  Yes, the property is held as tenants in common, and mortgage is joint mortgage. So no disposal for taxes? I saw on this site somewhere there's a comment that adjusting deed of trust triger taxes and reply was depending on mortgage balance. But I can't find that page now.

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                    #10
                    Between a husband and wife with a joint mortgage all is fine and no tax is payable when a trust is created.

                    Your mortgage terms and conditions may not allow you to change the beneficial ownership without the lender's consent - which is worth checking.
                    If the mortgage and ownership are joint, there shouldn't be an issue from the lender.
                    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


                      #11
                      Originally posted by jpkeates View Post
                      If the property is held as tenants in common, the mortgage would have to accomodate that already - so it would have to be a joint mortgage.

                      If you are a sole owner with a sole mortgage, the change is going to be a lot more complex (and the lender is likely to say no).
                      Hii jpkeates. Many thanks for your advices so far. I have another flat in my sole name with a sole mortgage of 200k balance. I need to add my husband in title deed as I am not working now. He is. To my surprise, the lender is seems OK to add my husband to title deed with a small fee. It's not finalized yet but at least staff said Yes. So my plan is to gift him 1% which is 2k, so no stamp duty. Then I will file TR form to LR to add his name and 1%. Can I remortgage with him holding only 1% of the flat?

                      And as the other one, the first deed will be 1% for him, but when we actually sell, 2nd deed will be more for him (how much? we will have to work it out then).

                      Many thanks again.

                      Comment


                        #12
                        I'm suprised the lender said yes, so I don't really have anything helpful to add, to be honest.
                        Let's see what the lender does when they have to put something in writing.
                        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


                          #13
                          This is progress. I went to lender, they are happy to charge small fee to add partner on mortgage. But their personal advice is as it's joint mortgage, HMRC will deem it as 50% of mortgage balance for stamp duty. It's about 100k so 0+3%. I have 2 options (1) pay off the mortgage then add partner then remortgage. Do I bear the risk of being able to borrow less then? (2) pay down the mortgage to have balance of 80k, add partner, remortgage. Risk is the same, except I am on the book of current lender and remortgage amt is 120k less. Do you see any other options for me?

                          Comment


                            #14
                            If your husband is joining the mortgage, not just the title, that does make more sense, and will cause the problem outlined by the lender.
                            Your husband is basically paying half the mortgage liability for a tiny percentage of the property.

                            You could talk to a solicitor to see if there's any way round the SDLT issue.
                            You may be able to use some kind of trust to fix the proportions of beneficial ownership and mortgage liability -
                            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


                              #15
                              Scampicat:

                              Are you both holding the property as "tenants in common" so that each of you can leave your 50% share in a will to different persons ?

                              Does your husband's 2 pensions income exceed £45k?

                              I suggest both of you write a letter to Tax Office and say you are joint owners of the property and wish to seek approval for all the rental income to be treated as wife's income .

                              Comment

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