Attributing 50% of rental income to spouse

[keeno]

This is a very useful and informative forum - thanks. There are a number of treads in relation to optimising the ownership of properties (in particular BTL properties) from a tax perspective but I would be very grateful for any comments in relation to my own fact pattern:
I own 6 buy-to-lets in London, all in my sole name and each subject to a btl mortgage. Up until the 2009/10 tax year, rental losses ensured that no taxable income arose (I included all income and expenses in my tax return). For 2010/11 (and future years) taxable income does arise and I would ideally like to allocate 50% of the income to my wife (who has no other source of income and who effectively manages the properties on a day-to-day basis). Some salient points:
- as stated above, the properties are held in my sole name
- the rental income is paid into a joint bank account (the income effectively forms part of the family piggy bank - I do not have a separate bank account and in a practical, economic sense I regard my wife as the de facto joint owner).
Ideally I would like to attribute 50% of the rental income to my wife for tax purposes without having to effect a transfer of legal ownership (ie limit the transfer to beneficial ownership), eg a transfer of 50% of the beneficial ownership to my wife (but I'm not sure if that's recognised by HMRC if the legal ownership is in my sole name). 50% attribution (rather than say 99%/1% etc) is sufficient for our purposes as we will be moving back to Ireland and our only source of income in the UK will be rental income (clearly the UK rental income will be subject to tax in Ireland as well with a credit for any UK tax paid). Any advice would be greatly appreciated. Many thanks.

[section 44]

If you declare a trust over the properties so that you hold the legal title on trust for you and your wife then your wife would be entitled to 50% of the rental income. However, any such declaration of trust would not be retrospective (you cannot re-write history).

but I'm not sure if that's recognised by HMRC if the legal ownership is in my sole name

Generally legal ownership is irrelevant for tax purposes. Beneficial ownership is what matters.

[keeno]

Many thanks for the response. I will talk to my solicitor about documenting this. Yep, I didn't think that this could be applied retrospectively but thanks for confirming.

[section 44]

Remember that if your wife assumed, or is treated as having assumed (for example, if the legal title were to be transferred by you to jointly you and your wife such that the bank would require a new charge to be executed by both of you), any debt in respect of the acquisition of beneficial interest then this may give rise to a stamp duty land tax liability.

[keeno]

Thanks. If I execute a declaration of trust (or similar doc - to be confirmed by my solicitor) whereby 50% of the beneficial ownership is effectively transferred to my wife but legal ownership (and the mortgage loan) remains in my sole name (subject to checking any restrictions in the mortgage documentation), would the stamp duty issue be avoided? I appreciate that doing this kind of thing can have unintended consequences (be that stamp duty, CGT, etc) so I appreciate your flagging this issue. Cheers.