Second home purchase

Aben2014

Looking to buy 2nd home for working away from home - what is a tax efficient way to do this. I am a basic rate taxpayer and my wife is a lower rate taxpayer. Would it be better in my wife's name only?

jjlandlord

There is no longer any 'lower rate'.
It's just the basic rate then the higher rate for income above the personal allowance.

Aben2014

Sorry meant 40% tax payer

booksurr

since you will use it only as a "second home" whilst working locally presumably you have no intention of letting it so no exposure to income tax

as such your tax planning is all about exposure to CGT based on the gain in value between purchase price and selling price. CGT @18% applies only the to amount of gain between your wife's actual income and the HR threshold currently £41,865. above that value both she and you will pay at 28% so the saving is marginal since it is only 10% of a relatively small figure. This of course is based on 14/15 tax rates and the way in which CGT currently works....

it may well be more economical for both of you to own it as then you each get the £11,000 CGT personal allowance.

if you want more tax advice go see an accountant

pleasedelete

is it a cash purchase? If it needs a mortgage then the income provider for the mortgage (so you?) would have to be on the deeds.

Spidernick

I think the OP wants to know about income tax (although the CGT considerations are valid and the main element to focus on in many ways). There are no income tax deductions that I can think of. There may even be additional costs, as wasn't there talk of extra Council Tax on second homes (in some areas at least)?

Aben2014

Thank you all.