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Where Taxpayers and Advisers Meet

Using my non-working wife's tax allowance for rental income

marv
Posts:1
Joined:Wed Aug 06, 2008 3:04 pm

Postby marv » Tue Jul 15, 2003 8:27 am

I have a buy-to-let mortgage solely in my own name. Originally it was my main residence for two years on a standard mortgage deal but I got married, moved jobs(location) and decided to rent it out.

If I change my mortgage/deeds to joint ownership will I be able to use my non-working wife's personal tax allowance for the income I receive(ie. make my wife the full Landlady ?). Would joint ownership be immediate and acceptable to the tax office ?

accountant@uktaxshop
Posts:550
Joined:Wed Aug 06, 2008 3:04 pm

Postby accountant@uktaxshop » Tue Jul 15, 2003 9:01 am

Marv,

It is possible to do something like this.

As a starter, with a regular husband and wife joint ownership of a property, it is assumed that you have half the benefit. This would get you half way there.

However under ICTA88 S282B you could also make a declaration of benefit, i.e. 100% in your wifeÂ’s name.

However, this can be disregarded if either you retain the capital or income benefit of the house. I.e. if you simply make the declaration but all the money goes into your account it will be overturned.

One other thing to consider is that the CGT becomes somewhat complex. The initial transfer will not trigger a charge, however your wife will be assessable for subsequent period since it was her benefit, which could be better for your if you are a higher rate tax payer, but could also be worse than joint names with 50/50 share as you wont be able to use your personal allowance.

Off the top of my head I cant recall if husband to wife transfers are exempt from stamp duty, (someone may dive in on that point)But as you can see already, this isnÂ’t a straight forward thing, but could well be something to consider assuming you took the appropriate advice and did it properly.

Regards

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436


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