Transfer of house into 2 names to save tax

Fatman

My partner and I (not married) used to own a house together and both live in it. At a point in the past, I bought her out of the house and she moved out, I continued to live there.
We then moved into a different property together, and I put the house up for rent.
This has now been rented for a few years and there have been no problems

Due to a new job and a baby, I am now earning a more money and in a higher tax bracket, so paying 40% tax on rental earnings and she is working but is under the minimum amount of taxable earnings

Therefore, I think that transferring the house back into joint names would help us to save tax.

Questions:

1) Is this allowable?
2) Would we both have to do tax returns independently?
3) Does she need to be on the mortgage and the deeds to claim rent?
4) Can she only claim 50% of the rent?

Thanks

Andrew

CLAPTON

Fatman wrote: »

My partner and I (not married) used to own a house together and both live in it. At a point in the past, I bought her out of the house and she moved out, I continued to live there.
We then moved into a different property together, and I put the house up for rent.
This has now been rented for a few years and there have been no problems

Due to a new job and a baby, I am now earning a more money and in a higher tax bracket, so paying 40% tax on rental earnings and she is working but is under the minimum amount of taxable earnings

Therefore, I think that transferring the house back into joint names would help us to save tax.

Questions:

1) Is this allowable?
2) Would we both have to do tax returns independently?
3) Does she need to be on the mortgage and the deeds to claim rent?
4) Can she only claim 50% of the rent?

Thanks

Andrew

if the property is mortgaged then you would need to seek their permission and you would jointly be subject to the usually affordability rules and she would be on the deeds and mortgage




you would be liable to capital gains tax on the 'half' you give away


as you aren't married you can split the rent how you like


each would need to declare their share of the rent (net of costs) to HMRC

booksurr

1) yes - but would trigger any CGT liability for you on the % share transferred to her

2) yes - tax has been independent for decades. She has a source of untaxed income and therefore is required to declare this to HMRC, of course if her employment + net rental profit <£10,000 she will be below the income tax threshold so won't pay any

3) yes to both, lender won't allow her on deeds without being on mortgage

4) not married so can split in any % you want, does not have to mirror actual ownership split. However, the declared split you use will also dictate the split for CGT purposes