To sell or keep 2nd home

holly_hobby

jimmo wrote: »

Therefore if it can be achieved cheaply enough, it would be good tactics to convert to joint legal ownership now, whilst the couple are living in the property.

Don't forget possible SDLT issues which may be triggered on any TOE, as discussed in an earlier post. TOE legals circa £500 & if mortgaged lender agreement AND their admin fee

OPs wife will also need to advise any mge lender of her re-occupation, and if the mge is a BTL arrangement, the lender will obviously need to assess affordability based on her earned income (or jnt income if hubby's status is suitable and he is added under a TOE).

jimmo wrote: »

However in this case, we also have the issue of undeclared letting income. Admittedly without knowing the finer details of the family finances, it seems to me that it would be better for the wife to take any tax hit on the basis that she was the sole beneficial owner during the period of letting and for the couple to to share the liability for capital gains tax.

If tax is declared and paid in only her name, it will make it very difficult to prove his BO and thereby utilise his available CGT reliefs, esp as there is no Form 17 in play.

So, depending of course on her and his tax band, and if they want to utilise his 11k annual cgt exemption (plus any prev reported losses of his), I may consider declaring rental receipts and IT jointly ... of course some prior number crunching to ensure that his noting as a BO doesn't cause a higher IT liability for the couple, that would exceed any later utilisation of his CGT reliefs on disposal, would firstly need to be thorougly bottomed out before ....:) (or course if she is HR, and he is BR, then citing him as joint BO would be huge benefit).

Tricky and complex situ, and as always please verify all forum tax comment with your own qualifiied and licensed practioner.

Hope this helps

Holly x