Transfer ownership of house to wife

simonfitba

Hello all,

Not sure if this is the right place for this, but here goes...

Can I transfer my house (main property without mortgage) to my (non-taxpaying) wife so she can rent it out when we buy a new house? Therefore getting better returns on rental income?

I suspect HMRC don't allow this, but just thought I'd ask.

rachelonna

I didn't think there is anything that prevents you from doing this. I'm pretty sure that rental has nothing to do with the income tax you pay on your salary.

This said, I'm by far not a tax expert, so possibly totally wrong - have you looked at the HMRC website or just direct gov?

ognum

rachelonna wrote: »

I didn't think there is anything that prevents you from doing this. I'm pretty sure that rental has nothing to do with the income tax you pay on your salary.

This said, I'm by far not a tax expert, so possibly totally wrong - have you looked at the HMRC website or just direct gov?

The information above is wrong!

You can transfer the property to your wife, the rental income can then be used against her tax allowances. you ban do this yourself by downloading forms from Land Registry site.

Your wife will need to do self assessment for tax purposes and keep accurate information of income and expenditure on your rental property.

Are you planning to sell in the near future because it may be better to keep the property in your name for CGT purposes if you are!

simonfitba

I may sell the property in 2-5 years. How would CGT be affected?

ognum

if you sell a property you own and live in within 3 years there is no CGT. You will need to value the house on transfer to you wife and she will pay tax on any gain in her ownership as she has not lived/owned the property minus her allowance of course. This may not be much as prices are not moving much at the moment.

there are many posters on this forum more knowledgable than me so I am sure they will chip in.

As far as you tax is concerned it is advantageous for your wife to own the property. I own our rental properties and don't work other than these, my husband is in paid employment and has no tax liability for 'my' properties

simonfitba

Thanks for the help ognum. Seems like I might end up in a situation like yours.

At present my wife and I live in a flat I own but we're planning to buy a family home and then rent the flat out. Seems like it might be sensible to transfer the flat into my wife's name.

SuzieSue

There is no problem transferring the flat in to your wife's name so that she receives the income for tax purposes, but remember that once you do, the property is hers. I'm sure you trust your wife, but so did everyone else who did the same thing and then found that their wife decided to leave them. I'm sure it won't happen, but I personally wouldn't let the tax tail wag the dog and would keep everything owned 50:50.

Apologies if the above isn't relevant to you, but I just want to warn other people who are thinking of doing the same thing as I have seen it go wrong so many times when people divorce.

simonfitba

Wise words SuzieSue. But I trust my wife.

Johnhowell

As you are relinquishing an asset your wife may have to pay Stamp Duty Land Tax. When I bought in to my partners property we kept the amount transfered to below the SDLT threshold.

Suggest you speak to a solicitor for advise.

Good luck,
John

SuzieSue

Johnhowell wrote: »

As you are relinquishing an asset your wife may have to pay Stamp Duty Land Tax. When I bought in to my partners property we kept the amount transfered to below the SDLT threshold.

Suggest you speak to a solicitor for advise.

Good luck,
John

If there is no mortgage then there will be no SD to pay if the transfer is a gift (ie no money changes hands).

ognum

I have transfer property above the stamp duty threshold and not needed to pay any Stamp Duty!