Transfer buy to let to spouse to save tax??

qwertyqwerty · 20 October 2019 at 4:18PM

Hi

Could do with advice on the following situation:

I am a higher rate tax payer, my wife who currently earns 42k isn't
We have a joint residential mortgage.
I have a buy to met mortgage in my name only currently with 100k left to pay
I am in the process of remortaging with a new provider, and will have a new buy to let with 80k left to pay(putting more money into it)

The new mortgage payment will be approx £150 per month interest only, with predicted rental income of £650 per month.

The question I have is, now that I am re-mortgaging can I add my wife to the new mortgage, to take benefit of lower rate tax payments on rental income?
I believe no SDLT will need paying if I did this? Is it just a simple case of getting her added to the mortgage, or are there any forms that need filling out or deeds need changing?
My understanding if I did this means we would both be 50:50 liable, would it also be worth considering making my wife have control in a 1:99 split? If so what is the exact process for doing this, is this where the declaration of trust form comes in? Do I need a conveyancing solicitor to take a look? Is it even worth it from a savings on tax point of view?

Thanks,

00ec25 · 20 October 2019 at 6:11PM

please use search function. Q answered loads of times

it is the lender's decision if they accept your wife, not a matter of your choice
no higher rate SDLT as married, and no std rate as mortgage sum is "small"
Tenants in Common
Declaration of trust nominating the required split
Form 17 reflecting DoT

qwertyqwerty · 20 October 2019 at 11:52PM

Thanks for the prompt response.

With regards to the mortgage, is it possible for me to be the sole person on the mortgage and still do a declaration of trust with 99% to my partner?

Thanks,

qwertyqwerty · 21 October 2019 at 7:52PM

Cana anyone answer the above question? Thanks

unholyangel · 21 October 2019 at 9:02PM

qwertyqwerty wrote: »

Thanks for the prompt response.

With regards to the mortgage, is it possible for me to be the sole person on the mortgage and still do a declaration of trust with 99% to my partner?

Thanks,

I think you should get legal advice. The DoT would basically say she owns 99% of the property and you're just "holding" it for her. Which would likely be a breach of your mortgage conditions. Technically you don't own 99% of the beneficial interest required to be able to legally assign it to someone else. Or at least I suspect not given the need for a mortgage.

Disjoint · 28 October 2019 at 10:36PM

Ask yourself two questions:
Do you believe your bank would be happy to have your wife own 99% of the house with a much lower salary than yours?
Will the bank be happy for you to be liable at 100% on a house that is virtually not yours anymore?

In essence the bank won't let you do this. You need to get her added to the mortgage with the bank and approved and do a declaration of trust to reflect this split.

Transfer buy to let to spouse to save tax??

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