Marriage and Property Law

McAhuna

My wife and I married 7 years ago and then bought a house.
We have since moved to a new area, but we couldn't sell the old house so we rent it out. We use the money to rent a flat in our new home area.
My wife is unemployed but I work. I understand if we transfer ownership of the house we own to her name we will pay less tax on our profit from renting.
We are very happy together, but in the unlikely event of us divorcing would the house belong solely to her if we did this? Or would the fact that we bought it together after marriage mean it belonged to both of us regardless in whose name it was registered?
Any advice gratefully received!

lincroft1710

If home you rent out is subject to a mortgage in joint names then you cannot transfer it to her sole name.

00ec25

Lincrofts answer is the relevant one in your case, ie you would have to remortgage and your wife's income would be the only value used to decide the size of mortgage she could get

For your info all the assets in a partnership (marriage or civil) will be treated as one pool and if there is a financial settlement as part of a divorce, then the fact something is in one partners name does not prevent it being included in the pool and then being divided according to the settlement terms

McAhuna

I should have mentioned - we have paid off the mortgage and own the house.

McAhuna

00ec25 wrote: »

For your info all the assets in a partnership (marriage or civil) will be treated as one pool and if there is a financial settlement as part of a divorce, then the fact something is in one partners name does not prevent it being included in the pool and then being divided according to the settlement terms

Then I assume there is no reason not to put it in her name?

tbs624

00ec25 wrote: »

Lincrofts answer is the relevant one in your case, ie you would have to remortgage and your wife's income would be the only value used to decide the size of mortgage she could get

If any mortgage taken out was a BTL then the wife's incomewould *not* be the deciding factor - i the potential rental income would be. ( Have noted that OP says no mortgage)

Ian_W

If you put the house solely in your wife's name it may help you re income tax now - but might cost you when you sell if you're liable to capital gains tax as each individual has a £10K+ annual CGT allowance.

Paying off the mortgage hasn't helped your income tax position as the interest you pay is an allowable expense you can deduct from your profit before you pay tax.

May be worth consulting an accountant for your best options.