"Joint Property Ownership/Tenants in Common" in Scotland?

JonMitchell

Dear all

We, both my wife and myself, just recently bought a property in Scotland under my wife's and myself - joint ownership. I am currently still in full time working, another few years before my retirement age but my wife is fully retired. Am planning to use this flat as a rental or holiday let to help support us when we retire but have few queries:

1.) Title deed - is currently, according to Scottish, "Each of us own our share of the property but on death our share will pass in accordance with what our will says. If we do not have a Will it will pass in accordance with the rules of intestacy in Scotland.

As I am still in full-time employment, any income that is generated from the property will be 50/50% split for tax submission to HMRC, which will then add on to tax payment really.

a.) Is there a possibility of trying to maximising the rental income towards my wife who is fully retired?

b.) By this I mean - Is there anything similar, in Scotland, to England/Wales like "Joint Property Ownership/Tenants in Common" where on the title deed, we are still a couple on 50/50 share of the property but we can draft an agreement where she can own 90% of the property while I own 10%?

Am asking this just trying to maximise our rental income for retirement purpose.

BTW - we have our own property in England and owned this flat property in Scotland, ie only 1 property for rental.

Any comments and advice is greatly appreciated.

Pixie5740

Yes there is and I'm surprised you didn't discuss this with your solicitor when you bought the property. It can be altered but I think you will need to get a solicitor to do it.

JonMitchell

Thanks Pixie5740.

We did asked about this from our solicitor but was told is usually 50/50% share up in Scotland, though I failed to follow through it due to sickness during the conveyancing period. Have had to bite the bullet now to revisit the topic again.

booksurr

the scottish system uses the term "common property" instead of tenants in common

http://www.scottishlaw.org.uk/lawscotland/abscotslawland.html#P45_5144

it would appear that you instead own as Joint Tenants which has the meaning you think it does, ie there are no his 'n her shares for the purposes of determining rental income split.

The wording you quote at point 1 appears to relate to the fact that unlike in England a joint tenant can leave their share on death in their will to someone else if there is expressly stated a "survivorship" clause on the property deeds. Not clear there is such on yours given the limited info you provide.
https://www.savvywoman.co.uk/526/buying-a-property-together-what-the-law-says-if-you-live-in-scotland/

Nonetheless it is clear that you do not have unequal ownership and therefore as a married couple you do fall into the HMRC default of 50/50 split of income. Best you go see a solicitor about getting your ownership altered so that you can indeed exercise option b) and split the income unequally - although you will still need to do a Form 17 and evidence the unequal split with the Deed of Trust both of which must be submitted to HMRC before you can claim unequal profits for income tax purposes

JonMitchell

Thanks for the info booksurr, that's helpful!