Joint tenants or tenants in common

km0928

My husband and I are currently buying a house which we hope to rent out. Our solicitor has asked us if we want to be joint tenants or tenants in common. He said that there may be capital gains tax benefits and I was wondering what these are?

G_M

Do you (both) plan to live in the property as your main home?

If so, CGT does not arise.

See also:

http://www.landregistry.gov.uk/public/guides/public-guide-18

xylophone

Do you (both) plan to live in the property as your main home?

It would appear not?

My husband and I are currently buying a house which we hope to rent out.

http://www.taxcafe.co.uk/resources/letsgettogether.html might be worth a look.

G_M

xylophone wrote: »

It would appear not?
http://www.taxcafe.co.uk/resources/letsgettogether.html might be worth a look.

Ooops!

:rotfl:

I don't even have the excuse that it was burried in a mass of irrelevant text....

00ec25

you are married therefore tax law is very specific in your circumstances as to how you must account for the respective shares of rental income on your individual tax returns:

Joint Tenants
the rental income can only be split 50/50. No other % is allowed. This matters if one of you is a higher rate or non tax payer for obvious reasons

Tenants in Common
used where you deliberately want to vary the ownership portion in favour of the person with the lower tax liability . As a married couple you must additionally notify HMRC of the split using a Form 17 - this is what the guide referenced by xylophone refers to as "electing"


also bear in mind that if one of you dies with joint tenancy the survivor automatically inherits the deceased's share. With TIC the deceased's share can be left to anyone stipulated in the will, this has implications for tax planning for inheritance (if IHT is a realistic prospect!)