2nd house we let out mortgage is coming to an end

by **TC01** on Thu Dec 29, 2011 1:08 pm

Hi - My husband and myself have a property each in our own names only. The house we live in is in my name and the mortgage ends in approx 5 years. The other house is in my husbands name and we have always let this property out through a letting agent and paid tax on this (we have never lived in this property). The rent we receive just pays the mortgage etc. Our tax bill at the end of the tax year we normally have to pay approx £2.00 or they owe us approx £2.00 (yes two pounds). This mortgage is due to end in the next 15 months. Also my husband is hoping to retire in 6 years, but I still have a long time to go. Our question is - once the rental house's mortgage is finished would we be better transfering the property across to my name, as we think it may affect my husbands savings and pensions etc, as it would be classed as income? And do we need to live in it for a period of time?

Any information will be gratefully received.
Thank you in advance

by **Peter D** on Thu Dec 29, 2011 8:07 pm

It depends on your relative incomes both in 15 months and in 6 years. There are other factors involved and remember that if you dispose of the rental property and you are both owners then you have two sets of CG Allowance available to you. I think we need more information. Regards Peter

by **mullet** on Thu Dec 29, 2011 10:11 pm

And do we need to live in it for a period of time?

For what purpose? To hopefully avoid capital gains tax? Temporary occupation does not amount to "residence" in the context of decided tax cases.

by **TC01** on Sat Dec 31, 2011 10:42 am

yes, if we decided in the near future to sell the property - we had heard somewhere about a 6 month ruling?

by **TC01** on Sat Dec 31, 2011 10:44 am

Hi Peter
The house we live in is in my name only and the house we rent out is in my husbands name only, neither house is or has previously been in joint names.

by **Peter D** on Sat Dec 31, 2011 2:40 pm

I do not see how thw rental income can effect his savings or his pension. The rental income ideally needs to be paid to the lower income spouse either by legal or beneficial ownersahip to minimise the IT on the rental income. You should also bve aware that if you sell the property and you were to arrange to be joint owner prior to any exchange of contract then you would be allowed two CG Allowances of £10,600 each. Regards Peter