Renting house out + tax

wonderman

We are thinking of renting our family home out and moving to a new location and renting a house there - for 12 months until we decide where we want to move to ultimately. Our current house is in joint names (husband + wife); i pay higher rate tax, wife is non earner. No mortgage; rental value ca £30k pa.
Would it make sense to transfer house ownership to my wife so that the rental income is taxed at a lower rate?
What would be involved in this transfer - does it involve fees?
Thanks

theartfullodger

Interesting:

a) How much do you trust your wife?? How much does she trust you ?? (I know, rude to ask, but you are talking big numbers here...). I'd only do it if I (the man) ended up sole owner of new place, but then wife has rights in/to family home so it will be an unequal deal. Sorry, but someone needs to say these things...
b) As rent will be over £25kpa it CANNOT be an AST. Take legal advice: From someone who knows about these things (most solicitors & letting agents don't know or have huge gaps of knowledge..)

Cheers!

Lodger

wonderman

theartfullodger wrote: »

Interesting:

a) How much do you trust your wife?? How much does she trust you ?? (I know, rude to ask, but you are talking big numbers here...). I'd only do it if I (the man) ended up sole owner of new place, but then wife has rights in/to family home so it will be an unequal deal. Sorry, but someone needs to say these things...
b) As rent will be over £25kpa it CANNOT be an AST. Take legal advice: From someone who knows about these things (most solicitors & letting agents don't know or have huge gaps of knowledge..)

Cheers!

Lodger

Thanks - excuse my ignorance but what is AST?

BitterAndTwisted

theartfullodger wrote: »

a) How much do you trust your wife?? How much does she trust you ?? (I know, rude to ask, but you are talking big numbers here...). I'd only do it if I (the man) ended up sole owner of new place

Erm, what new place? OP was intending to rent, not buy in the short-term.

In my opinion, seeing the OP is a higher tax-bracket earner they obviously have the means to take proper legal and tax-advice and should seek it.

IveSeenTheLight

wonderman wrote: »

Thanks - excuse my ignorance but what is AST?

Assured Shorthold Tenancy

http://www.communities.gov.uk/documents/housing/pdf/138286.pdf

IveSeenTheLight

BitterAndTwisted wrote: »

Erm, what new place? OP was intending to rent, not buy in the short-term.

theartfullodger was referring to the OP's question

"Would it make sense to transfer house ownership to my wife so that the rental income is taxed at a lower rate?"

wonderman

IveSeenTheLight wrote: »

theartfullodger was referring to the OP's question

"Would it make sense to transfer house ownership to my wife so that the rental income is taxed at a lower rate?"

You have it - that is the question. Assume that I trust her not to run off with it. Do I need to transfer deeds to her name (from joint names) for her to receive the rental income- she is a non tax payer and I am higher rate. What is the cost of the transfer approx.
Any other pros and cons?
And yes the "new place" will be rented to us.