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  • FIRST POST
    • Cariad71
    • By Cariad71 7th Feb 18, 7:45 PM
    • 161Posts
    • 149Thanks
    Cariad71
    Signing the deeds over
    • #1
    • 7th Feb 18, 7:45 PM
    Signing the deeds over 7th Feb 18 at 7:45 PM
    My husband and myself jointly rent our old house out. He pays tax at 40%, and I pay it at 20%.
    Iím currently having to leave my job due to ill health. We are thinking of putting the old house into my name so that only I have to pay the tax. As I wonít be working, I wonít have to pay any tax as the rent is less than 10k a year.
    Obviously we need to see a solicitor to implement this. So my questions are:
    Is this allowed?
    What are the pitfalls for my husband or myself?
    What are the potential problems that could arise?

    Thanks in advance!!!128578;
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
Page 1
    • G_M
    • By G_M 7th Feb 18, 9:47 PM
    • 43,787 Posts
    • 51,754 Thanks
    G_M
    • #2
    • 7th Feb 18, 9:47 PM
    • #2
    • 7th Feb 18, 9:47 PM
    Mortgaged?
    • Cariad71
    • By Cariad71 8th Feb 18, 1:59 PM
    • 161 Posts
    • 149 Thanks
    Cariad71
    • #3
    • 8th Feb 18, 1:59 PM
    • #3
    • 8th Feb 18, 1:59 PM
    No, the mortgage we have is on the house we live in.
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
    • Cariad71
    • By Cariad71 8th Feb 18, 6:53 PM
    • 161 Posts
    • 149 Thanks
    Cariad71
    • #4
    • 8th Feb 18, 6:53 PM
    • #4
    • 8th Feb 18, 6:53 PM
    Anyone got any ideas? Thoughts?
    I am going to see a solicitor, but want to be prepared.
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
    • 00ec25
    • By 00ec25 8th Feb 18, 7:34 PM
    • 6,243 Posts
    • 5,768 Thanks
    00ec25
    • #5
    • 8th Feb 18, 7:34 PM
    • #5
    • 8th Feb 18, 7:34 PM
    Anyone got any ideas? Thoughts?
    I am going to see a solicitor, but want to be prepared.
    Originally posted by Cariad71
    yes, it is potentially a very bad idea

    you say "our" old house... I take that to mean that it is somewhere that you both previously lived in as your main home whilst both were owners of it (either before or during your marriage?)

    - the property is now let out to tenants
    - there is no mortgage
    - you are married

    is the property owned as joint tenants or tenants in common?

    placing the property into sole ownership means the husband will lose his claim to private residence relief and therefore when the property is eventually sold it could cost you as a couple a very great deal of extra Capital Gains Tax

    if retained as co-owned by both of you and (importantly) owned as tenants in common, the sensible tax efficient solution is for him to retain 1% ownership (to preserve his PRR) and for you to have 99%

    when you say "the rent" is less than 10k do you mean the profit or the income before costs? Even if you mean profit 1% of 10k is £100 and tax at 40% on that is £40. Are you really going to quibble over £40 compared to £ thousands of extra CGT?

    you then register that split with HMRC via a Form 17 and supporting declaration of trust and then report your respective rental income shares in those proportions

    if already owned as TIC you do not need a solicitor, you simply do the forms yourself. Even oif owned as JT, converting it to TIC is a relatively simply DIY task, just follow the instructions on the .Gov website
    Last edited by 00ec25; 08-02-2018 at 7:37 PM.
    • bris
    • By bris 8th Feb 18, 8:25 PM
    • 7,522 Posts
    • 6,533 Thanks
    bris
    • #6
    • 8th Feb 18, 8:25 PM
    • #6
    • 8th Feb 18, 8:25 PM
    The easiest way to do it is to just take an administration wage from the property for 10k a year. It's an accountant you need to speak to not a solicitor.
    • Cariad71
    • By Cariad71 9th Feb 18, 4:26 PM
    • 161 Posts
    • 149 Thanks
    Cariad71
    • #7
    • 9th Feb 18, 4:26 PM
    • #7
    • 9th Feb 18, 4:26 PM
    Thank you for the relies.
    Bris.....I'm not sure that HMRC would accept an admin fee of 10K. If so, no one would pay any tax on let properties.

    0Oec25..I'll have to find out what sort of tenants we are. We are still married. The 10K is before tax deductable expenses.
    I didn't realise that we can change from JT to TIC without a solicitor.

    Thank you! Much appreciated.
    Will my husband retain his full PRR even if he only owns 1%? Is the decleration of trust a document?
    Last edited by Cariad71; 09-02-2018 at 8:09 PM.
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
    • Cariad71
    • By Cariad71 14th Feb 18, 2:21 PM
    • 161 Posts
    • 149 Thanks
    Cariad71
    • #8
    • 14th Feb 18, 2:21 PM
    More help please
    • #8
    • 14th Feb 18, 2:21 PM
    How do I find out if we are tenants in common or joint? I'm guessing we are joint tenants if this is standard procedure when taking out a mortgage. The problem is, as we have paid off the mortgage I threw out all the paperwork. Is there a way I can find out? Or do I have to contact a solicitor to find it out?
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
    • LateStarter
    • By LateStarter 14th Feb 18, 4:01 PM
    • 171 Posts
    • 189 Thanks
    LateStarter
    • #9
    • 14th Feb 18, 4:01 PM
    tenants in common or joint:
    • #9
    • 14th Feb 18, 4:01 PM
    Ownership is totally seperate to your mortgage loan (which you don't have anyhow). You still own the house, so presumably you have a copy of the Title Deed? If not you can pay and download it from the Land Regsitry.
    Last edited by LateStarter; 14-02-2018 at 4:02 PM. Reason: Title
    • Cariad71
    • By Cariad71 14th Feb 18, 4:33 PM
    • 161 Posts
    • 149 Thanks
    Cariad71
    Thanks for replying Late starter.

    I have just phoned a solicitor and they said they can do it for £600 plus vat So now I'm all fired up to try and do it myself.
    Ok, I've kept the 'Charge Certificate' which is a HM Land Registry document. But it does not say 'joint tenants' anywhere. It does however say 'Title Absolute' proprietor myself and my husband. Am I looking in the wrong place? Or does Proprietor mean joint tenant?
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
    • LateStarter
    • By LateStarter 14th Feb 18, 9:43 PM
    • 171 Posts
    • 189 Thanks
    LateStarter
    In section B (where it says 'Title Absolute'), is there a passage saying

    "No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court".?

    If it says this, you are tenants-in-common..

    If it does not say this, you are joint tenants.
    • Cariad71
    • By Cariad71 15th Feb 18, 10:56 AM
    • 161 Posts
    • 149 Thanks
    Cariad71
    Section B just lists both our names and the address so it seems that we are joint tenants.
    Thank you LateStarter. Do you think it's possible to create my own Declaration of Trust using a template? Or do I have to part with £600......
    Starting balance £173,000 (Sept 2012) interest only so if we do nothing We will owe this at the end of the term!!!128513;!!!128513;
    Balance as of Sept 2014 £165,803
    Balance as of Feb 2015 £163,360
    Balance end of July 2015 £159,050
    Balance as of Jan 2017.... £138,033
    • 00ec25
    • By 00ec25 15th Feb 18, 4:13 PM
    • 6,243 Posts
    • 5,768 Thanks
    00ec25
    Section B just lists both our names and the address so it seems that we are joint tenants.
    Thank you LateStarter. Do you think it's possible to create my own Declaration of Trust using a template? Or do I have to part with £600......
    Originally posted by Cariad71
    as you (appear) to be JT you will need to convert to TIC before you can do anything about declaring unequal shares of the rental income and profit.

    there are various guides on .Gov and the Land Registry website that explain how to DIY JT>TIC

    https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common

    be very careful to stay on the . GOV website for the land registry !!!!! There are lots of near same name websites that charge commercial prices!
    https://www.gov.uk/government/organisations/land-registry

    once you are TIC only then can you do a Form 17 and yes a declaration of trust must be in writing , you can research its wording online

    https://www.gov.uk/government/publications/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17


    i am not recommending this one as it will charge you! It is simply my first google result, but this may give you a starter for a DoT
    https://www.gov.uk/government/publications/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17
    Last edited by 00ec25; 15-02-2018 at 4:15 PM.
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