rental property income tax/CGT advice please

Atui

Background:
- I bought a flat 15 years ago and lived there for the first 2 years. I was single at the time I bought it (and moved out).The property is under my name only.
- I let the property since then (so roughtly 13 years)
- I am a higher tax payer (40% band) and am well above the threshold.
- I may want to sell the property in 2028 ish - to be honest it's not a very good investiment, the value is only raised by 50k for 15 years.
- I'm married now (for 10 years ish), and my partner is at 20% tax band. And he will be rougly on the threshold of 40% band if all rent had gone to him.
- The flat is mortgage free.

So here am considering how to minimise the incoming tax on the rental I'm paying (for the next 5 years), and CGT when I sell it in 5 years time.

So am now considering of adding my partner's name to the ownership of the flat.
Am I right in thinking,
1)  then there may be a way to allow split of benefit to be 1% (me) and 99% (partner), so we only need to pay 20% tax on rent income. Does it need to be joint ownership of tenant in common? Or there doesn't exist such thing for a flat?
2)  When we sell the flat, do we get CGT tax free allowance doubled? (so 6k * 2). But how is CGT calculated between us, is it based on 1% and 99% or 50% and 50%?
3) To add him onto the owership of my flat, does this need to go through a conveyancer or could this be D.I.Y.?
4) As I lived in the flat for 2 years myself, am I still entitled any CGT partial relief?
5) Do we need to get my tenant to sign a new contract with my partner's name as landlord?
 
Many thanks.

Jeremy535897

Presumably we are talking about a long lease of well over 50 years, and located in England or Wales? You will need to talk to a solicitor on arranging a transfer of the lease into joint names as tenants in common (which applies to both leaseholds and freeholds), and whether that should be a legal transfer, or a beneficial transfer. The latter may require you to register the joint ownership under the Trust registration Service.

There is no restriction on the percentages you hold. He could have 99% and you 1%. The capital gains tax position will follow the ownership percentages, so 90% 10% may be better (remember that by 2024/25, the annual exemption falls to £3,000). The rental position is more complex, as income arising on property jointly owned by spouses is taxed at 50% 50% unless you file a Form 17 within the relevant time limit to change it to the actual proportions owned.

Your husband will be deemed to acquire his share of the property for the relevant percentage of what you paid, and he will be entitled to regard your 2 years of occupation as qualifying for main residence relief. 

Atui

Many thanks for your detailed reploy Jeremy!

lease is 9xx years and all the properties/parties are in England.

Good point re 90% 10% suggestion! I'll do some calulation offline to find what the best percentage is!

Atui

Just googled "legal ownership" vs "beneficial onwership". 
Would it be possible to keep me as the sole leagal onwer, while transferring 90% beneficial interest to my husband? This way would we still benefit from tax efficiencies for both income tax (rental) and Capital Gain tax?

Or is it a question for the solicitor?

Many thanks. 

Jeremy535897

Atui said:

Just googled "legal ownership" vs "beneficial onwership". 
Would it be possible to keep me as the sole leagal onwer, while transferring 90% beneficial interest to my husband? This way would we still benefit from tax efficiencies for both income tax (rental) and Capital Gain tax?

Or is it a question for the solicitor?

Many thanks. 

Yes, but you should have a solicitor deal with this. Whether you do it by a change in the deeds, or by declaration of trust, the tax effects will be the same, but ask the solicitor about registering the trust if you don't change the legal ownership. Also, remember to complete the Form 17 in the time allowed:
https://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/SpecPersTax_iForms/1.0/17&template=17.xdp