Tenants in Common - 99% to Wife, 1% to me

Sunny2good

Hi - I am thinking of changing the ownership for our 2nd home (which we rent out).
We are married and the house is on a mortgage currently with both of us owning it as joint tenants. With my wife leaving work and me being in the higher tax band, I wanted to know if I can use up her tax allowances and be more tax efficient?

Is it possible to changes the ownership to 99% for her and 1% for me given the property is still mortgaged ? Will there by any SDLT charges as I've read somewhere that there "might" be.

If its possible, can i do this myself? If so, i would really appreciate some help in trying to do so. Having read up on it, i think it involves using the SEV form to severe the joint tenancy and then a Form17 to change the ownership % but I'm not too sure of the process.

So it would be great to hear from someone who has done something similar (either themselves or via a solicitor) or knows whats involved.

booksurr

follow the guide on the .gov website
https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common
How to apply if the other owners agree to the change Download and fill in form SEV to register a ‘form A restriction’ if all owners agree.
Send the form and trust deed to Land Registry’s Citizen Centre. There’s no fee.

you will need to draw up a Declaration of Trust to record the 99/1 split. You can DIY that as (in its basic form) it is simply a few words on a bit of paper. Obviously however the internet is full of lawyers trying to persuade you into buying their version - your decision! It does not necessarily have to be a Deed (ie witnessed) but HMRC will require the declaration to be submitted with the Form 17 as evidence of the 99/1 split of beneficial interests in reality

as for SDLT it rather depends on whether your wife is already a signatory to the mortgage? If she is then you are already jointly and severally liable for the mortgage so there is no transfer of liability between you and her so no chargeable consideration is involved as the debt is not altered

the are multiple places explaining the process - use google, for example:
http://www.deedoftrust.co.uk/index.php/guidance/hmrc-guidance

Sunny2good

booksurr wrote: »

you will need to draw up a Declaration of Trust to record the 99/1 split. You can DIY that as (in its basic form) it is simply a few words on a bit of paper. Obviously however the internet is full of lawyers trying to persuade you into buying their version - your decision! It does not necessarily have to be a Deed (ie witnessed) but HMRC will require the declaration to be submitted with the Form 17 as evidence of the 99/1 split of beneficial interests in reality

Fantastic. Thanks for your detailed reply. I was wondering what some online agencies and solicitors were charging fees for and it makes sense now. I will go down the DIY route.

booksurr wrote: »

as for SDLT it rather depends on whether your wife is already a signatory to the mortgage? If she is then you are already jointly and severally liable for the mortgage so there is no transfer of liability between you and her so no chargeable consideration is involved as the debt is not altered

the are multiple places explaining the process - use google, for example:
http://www.deedoftrust.co.uk/index.php/guidance/hmrc-guidance

Thanks again. My wife is already a signatory on the mortgage so no changes needed here.

martindow

Won't the mortgage lender need to be involved with a change like this? If so they may well insist on a solicitor making the changes.