Two properties and now married

Skintski

Hi
We got married in December and are now wondering what impact our housing situation will have on tax. We are both employed full time.
My partner had separated from his ex and moved into a house in his sole name in February 2017. He moved in with me in February 2019 and he rented his house out and uses an accountant to do the tax returns for this. It’s not a big money spinner, it wasn’t designed to be and so it just about covers itself. I have owned/mortgaged my home just in my name since 2007. We have kept our finances entirely separate and intend for that to continue.

Since we are now a married couple does this effectively mean that we both own a second home? Will there be tax implications for me on his property due to the rental income even though I am not named on the mortgage or the deeds? Will it also have any impact in the future as his property will require remortgaging in a years time? 

All help gratefully received.
Thank you

[Deleted User]

On your husbands property - no implications for you at all as it is not your property and doesn’t become your property simply because you have married. The income of married couples have not been combined for tax purposes since1990! If he were to sell his property he would have exposure to capital gains tax as it is now no longer his main residence.

On your property - no implications for him for the same reasons.

Skintski

Thank you very much for your help.

Jeremy535897

There can be stamp duty implications. See https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

"Who the higher rates apply to

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).

Buying with someone else

The rules apply to each person (and their spouse) who is buying the property.

If any of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole."

[Deleted User]

Jeremy535897 said:

There can be stamp duty implications. See https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

"Who the higher rates apply to

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).

Buying with someone else

The rules apply to each person (and their spouse) who is buying the property.

If any of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole."

But there is no property being purchased in this instance. Surely it’s not retrospective? (Know nothing about stamp duty)

Jeremy535897

No, but it is something to consider for the future. There are no current CGT issues either as OP has not suggested any property will be sold in the foreseeable future.

Skintski

purdyoaten2 said:

Jeremy535897 said:

There can be stamp duty implications. See https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

"Who the higher rates apply to

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).

Buying with someone else

The rules apply to each person (and their spouse) who is buying the property.

If any of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole."

But there is no property being purchased in this instance. Surely it’s not retrospective? (Know nothing about stamp duty)

Thank you both for your help so far. 

We don’t plan on buying any further additional properties or selling the one that is being rented out, however at some point we would like to relocate where we live so do I assume that I would have to pay the higher stamp duty if I sold the house that I own and bought a new one solely in my name?

Does this also mean that if we do move our residence that we have to pay any CGT on that house please or does that not count because we are living in it?

[Deleted User]

I presume ‘that house’ is the house that you are currently living in which is in your sole name. There would be no exposure to CGT when you sell so long as it is your main residence throughout.

Stamp duty is not something that I know too much about but it seems to me that Jeremy has dealt with this above.

SDLT_Geek

Skintski said:

We don’t plan on buying any further additional properties or selling the one that is being rented out, however at some point we would like to relocate where we live so do I assume that I would have to pay the higher stamp duty if I sold the house that I own and bought a new one solely in my name?

At the time of selling the house you own and buying another you will need to check the SDLT rules as they are at the time.  There is guidance on them at SDLTM09800.  As the rules presently stand, the extra 3% should not apply on you selling your home and buying another, even if your spouse owns another property, if a number of conditions are met, including:
(a)  Your spouse has been living in your house as his only or main residence,
(b)  Your spouse intends to live in the house you buy as his only or main residence.
I refer to the rules around Condition D as the "replacement exception".