Hi Taxationweb,
Firstly thank you very much for letting me sign up! I guess like most people, it is most helpful to get a perspective from experts on line before committing to going deeper into potentially complicated tax arrangements.
My wife and myself own a number of rental properties outright, as tenants in common, and they are supported by trust deeds. My wife owns 99% and I own 1%. Three of them are mortgaged by additional loans on our main residence. I am a high-rate tax payer so these trust deeds support HMRCs Form 17 declaration so that my wife takes on the tax liability for the rental income. I am now 52 and my wife is 48 and we are considering retiring in 5 years. At that point we may want to rebalance the ownership more in line with joint tenancy to apportion the tax liability more effectively. The rental properties are worth around £450k presently, and our main residence is of a similar value. I have a pension pot valued at £325k today and we both have some paid up occupational pensions to draw. I have read that if we change the ownership on the rental properties to a 50/50 basis then I will be effectively receiving a gift from my wife of almost half the value of the properties and this will be subject to 18/28?% CGT. Is this correct?
Furthermore I can see that owning the properties under this deed trust may be stacking up some IHT problems later in life? We have 3 children and would like to leave one house to each of them.
Many thanks in advance for any help you can give.
Best regards,
Martin.
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