Deed of Trust between husband & wife

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Scenario - husband owns share of investment land generating income each year. He is higher rate taxpayer. His name appears on the title deeds for land.
How can husband minimise his tax on income without adding wife's name on title deed.
Is a deed of trust between the two the appropriate vehicle for this which would state his wife has share of half of the income for tax purposes or is it not that simple?

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  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    wookie66 wrote: »
    husband owns share of investment land generating income each year.

    He owns only a share of it? Shared with whom? Under what terms? Is this land in England & Wales?

    Is there any impediment to his just gifting his share to his wife?
    Free the dunston one next time too.
  • SeniorSam
    SeniorSam Posts: 1,670 Forumite
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    If the asset generates the income, then only by selling or gifting the asset, or part of it, can the income go to the wife.
    More information is needed as mentioned above, but from a taxation point, your assets = your income, so you would need to sell or split the asset. You could gift it into Trust, but the Trust would pay tax then.

    Sam
    I'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.
  • wookie66
    wookie66 Posts: 130 Forumite
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    Land is in England and shared with two others under tenants in common arrangement on freehold basis. I read the following online hence my query about deed of trust being used to move half of the income to wife and the husband retains half as his for tax purposes:


    Sole legal owner


    The legal title might be in the sole name of one of you. This is quite usual if the property is mortgaged, if one of you is a higher earner, or perhaps it was owned and occupied by one of you before you met. It is still possible to declare rental income as belonging to your partner, so as to make use of their personal allowance and marginal tax rates. The declaration of trust should be signed by both of you and will state that although the legal title is in one partner!!!8217;s name, they hold the net equity in the property for the benefit of the other partner in whatever shares are agreed

  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    wookie66 wrote: »
    Land is in England and shared with two others under tenants in common arrangement on freehold basis. I read the following online hence my query about deed of trust being used to move half of the income to wife and the husband retains half as his for tax purposes:


    Sole legal owner


    The legal title might be in the sole name of one of you. This is quite usual if the property is mortgaged, if one of you is a higher earner, or perhaps it was owned and occupied by one of you before you met. It is still possible to declare rental income as belonging to your partner, so as to make use of their personal allowance and marginal tax rates. The declaration of trust should be signed by both of you and will state that although the legal title is in one partner!!!8217;s name, they hold the net equity in the property for the benefit of the other partner in whatever shares are agreed


    That's talking about "partners" - there are special rules for married couples which require income apportioned as per legal ownership.
  • wookie66
    wookie66 Posts: 130 Forumite
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    Ok so does that mean only option is for husband to add wifes name onto the title deeds in order to effect a 50/50 spilt of the income?
  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    wookie66 wrote: »
    Ok so does that mean only option is for husband to add wifes name onto the title deeds in order to effect a 50/50 spilt of the income?

    For the wife to get a 50% share of the income, she must have a 50% share of the beneficial/legal ownership.
  • Keep_pedalling
    Keep_pedalling Posts: 16,641 Forumite
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    Pennywise wrote: »
    That's talking about "partners" - there are special rules for married couples which require income apportioned as per legal ownership.

    If they have been married a while it will be a marital asset anyway as far as divorce is concerned, so why the hesitancy?
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