Joint ownership for BLT split

G_M

By splitting ownership 25/75% (or whatever) you can potentially keep your wife just below the higher rate tax bracket so that her % of the income is taxed at the lower rate.

By owning the property jointly, you'll be able to get a mortgage based on your joint incomes etc, as opposed to the lending criteria being based on just one borrower. Plus of course there's the CGT advantage in due course.

But you should do some more in-depth maths to work out the propertion you each own.
* make sure you have a realistic rental figure - not some ambitious figure quoted by a letting agent designed to get you to sign up
* work out all your allowable expenses, including mortgage relief, agents fees et (unless you plan to DIY)

Enjoy your sandwich.

rahulbuyer

G_M wrote: »

By splitting ownership 25/75% (or whatever) you can potentially keep your wife just below the higher rate tax bracket so that her % of the income is taxed at the lower rate.

By owning the property jointly, you'll be able to get a mortgage based on your joint incomes etc, as opposed to the lending criteria being based on just one borrower. Plus of course there's the CGT advantage in due course.

But you should do some more in-depth maths to work out the propertion you each own.
* make sure you have a realistic rental figure - not some ambitious figure quoted by a letting agent designed to get you to sign up
* work out all your allowable expenses, including mortgage relief, agents fees et (unless you plan to DIY)

Enjoy your sandwich.

Thanks.. Let me take a bite first

saajan_12

booksurr wrote: »

so you are higher rate taxpayer and she is standard

if the rental income takes her over the standard rate then surely that means you are both higher rate so the split is irrelevant - your post is somewhat confusing?

Not confusing at all, income tax is on a marginal basis in the UK, so a higher rate payer doesn't suddenly pay 40% on all income. If the rental income took OP's wife £1000 above the threshold, she'd pay tax as a standard rate payer on everything else, and just 40% on that £1000. This is ofcourse cheaper than OP paying 40% on all the rental income if they're already above the threshold.

ETA: must say otherwise a very informative post from booksurr

movilogo

Make sure you factored that BTL tax changes from 2020. Also, unless you are already doing self assessment tax return, whoever is the owner will now have to do SA return.

If your wife can get a BTL mortgage then no harm buying on her name only.