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Where Taxpayers and Advisers Meet

using up expenses before changing ownership

someone
Posts:692
Joined:Mon Feb 13, 2017 10:09 am
using up expenses before changing ownership

Postby someone » Wed May 03, 2017 8:55 pm

Does the following sound above board or will it trigger anti-avoidance regs?

I have expenses of roughly 10K from sorting out a property prior to letting so I let it for 8 months - estimated income will be 10K. No income tax therefore due as income = expenses.

I then transfer 99% to wife. SDLT of approx 5K due to mortgage but I estimate income tax savings by wife will be of the order of 3.5k pa so should break even in another 16 months.

I'm assuming wife cannot use expenses I've incurred as I own property 100% and we weren't married when much of them were incurred.


Will wife be able to claim mortgage interest relief if I have mortgage? For technical reasons (collective enfranchisement) I do not want to change legal ownership.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: using up expenses before changing ownership

Postby maths » Thu May 04, 2017 2:31 pm

I'm assuming wife cannot use expenses I've incurred as I own property 100% and we weren't married when much of them were incurred.
Correct.

Will wife be able to claim mortgage interest relief if I have mortgage? For technical reasons (collective enfranchisement) I do not want to change legal ownership.
No.


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