Income tax on letting house- can I sign house over to wife?

Anglichanin

I own outright a property which I let out, and (luckily, after a long wait) recently received a pay rise to take me into the 40% income tax bracket.
This means I'll have to pay 40% on the rent I receive.
My wife's name is not on the deeds as we married after I bought it but since she pays lower rate income tax (20%) would it be possible for me to sign the property over to her in order to pay less tax on the rent?
Any advice would be very much appreciated!

andyd55

yes you can, or another way is to sign it over with a 90 to 10% ratio so that you still own it. I recently asked this question have a look at this.

Anglichanin

Thanks very much for the quick reply. Is it simply the fee for changing the deeds that I need to pay?
Also, because the house is owned outright, if we wanted to re-mortgage it (Buy-to-let) with the house 90 or 100% in my wife's name, I'd guess she can go ahead and do so on the basis of the monthly rent received, even though she doesn't have a credit history or an income much above minimum wage?

andyd55

Yes, speak to your solicitor and they will advise you in what needs changing and how much they will charge for it.

Not 100% on second question, as alot of BTL mortgage lenders have minimum requirements for income. If the income of the rent and your wife's salary is above this then I don't see why not?

Or you could take out the BTL with her and your two salaries plus the income of the rental would mean your well above the lenders minimum income.

Strapped

Yes. And keep your fingers crossed about the divorce.

Notmyrealname

andyd55 wrote: »

Or you could take out the BTL with her and your two salaries plus the income of the rental would mean your well above the lenders minimum income.

Our lender never asked us our income. The only things they were interested in was the value of the property and the rental valuation. This was a couple of years ago when things were about as tight as they could get with lending.