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Tenants in Comon - BTL
jimjames
Posts: 18,791 Forumite
in Cutting tax
My wife and I are in the process of purchasing a Buy to Let in addition to our current house. One of us is higher rate taxpayer, other is basic rate.
The funds for the deposit will be coming from a joint account but the mortgage will be paid by the basic rate taxpayer although the mortgage is in joint name (due to BS rules for the BTL mortgage)
My aim was that we could define the interest in the property via Tenants in Common with a trust deed so that the basic rate taxpayer (who pays the mortgage) has the majority share and the high rate taxpayer has the lower share.
With 30% joint deposit and 70% mortgage, I'd calculated it would work out at 85% to the basic rate taxpayer (15% + 70%) and 15% (purely half deposit) to the high rate taxpayer.
Are there any HMRC rules for the division of investment property in this way? It would seem to tie in with the payments being made by each party as all mortgage paid by the 85% share. Also the basic rate taxpayer has no pension so this was one route to pay towards one hence paying the whole mortgage.
The funds for the deposit will be coming from a joint account but the mortgage will be paid by the basic rate taxpayer although the mortgage is in joint name (due to BS rules for the BTL mortgage)
My aim was that we could define the interest in the property via Tenants in Common with a trust deed so that the basic rate taxpayer (who pays the mortgage) has the majority share and the high rate taxpayer has the lower share.
With 30% joint deposit and 70% mortgage, I'd calculated it would work out at 85% to the basic rate taxpayer (15% + 70%) and 15% (purely half deposit) to the high rate taxpayer.
Are there any HMRC rules for the division of investment property in this way? It would seem to tie in with the payments being made by each party as all mortgage paid by the 85% share. Also the basic rate taxpayer has no pension so this was one route to pay towards one hence paying the whole mortgage.
Remember the saying: if it looks too good to be true it almost certainly is.
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