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Where Taxpayers and Advisers Meet

25% Transfer of Equity to spouse, SDLT and CGT

campden6
Posts:7
Joined:Tue Jul 20, 2010 11:43 am
25% Transfer of Equity to spouse, SDLT and CGT

Postby campden6 » Mon Apr 10, 2017 10:01 am

Hi
Hope someone can advise me on this one

I own a BTL in my sole name value = £270K
It has a mortgage of 158K
I may want to sell it soon.
Can I Transfer 25% to my spouse as a gift?
Will this mean the consideration is only 25% of the mortgage - therfore under 40K and thus SDLT exempt? In particular the 3% issue worries me.
Would this mean I can use his CGT allowance when I sell?

What sort of transfer or deed would it have to be?
How much would it cost to do this or is there some sort of template I can do myself?

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: 25% Transfer of Equity to spouse, SDLT and CGT

Postby AGoodman » Mon Apr 10, 2017 1:03 pm

It depends on how you do it.

If you transfer it properly and your spouse comes onto the mortgage then the deemed consideration is 25% of the mortgage and free of any SDLT as the consideration is below £40,000.

The alternative is that you make a declaration of trust that you hold the property as to 75% for you and 25% for your spouse and confirm that you will continue to bear the mortgage debt. Again no SDLT as no consideration at all (he has not taken on the mortgage liability). Bear in mind that this could well be in breach of your mortgage terms.

Under either route, 25% of the gain would accrue to your spouse and he could set his allowance against it. Bear in mind that with route 2 he would also receive 25% of the gross proceeds, whereas under route 1 it would be net of his share of the mortgage debt.

Route 1 would need a solicitor (the bank might provide one). The latter needs a one page declaration of trust which you may be able to find via google but consider getting a solicitor to do it.


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