Transfer of equity in two steps?

[KarenFa]

I wonder whether this is an appropriate tax mitigation strategy:

BTL valued 90K with 70K mortgage, owned by Husband alone. Husband HR tax payer, wife LR tax payer.

1. Transfer equity to wife (50%) in one tax year with no moneys changing hands. Since her mortgage share (the chargeable consideration) is half of the mortgage, so 35K, no stamp duty is due.
2. Next tax year, further transfer 50% with no moneys changing hands. Again as chargeable consideration is under 40K, no stamp duty is due.

Is this an allowable strategy?

[someone]

I don't believe this works - otherwise it would be an obvious strategy to transfer a BTL into a company but I've never seen it mentioned anywhere.

I think the second transaction is linked to the first one so that you pay the full SDLT on the second one.

However, I believe that H&W now can transfer 125K before SDLT is due - the 3% is no longer in scope - but you'd need to investigate further. I don't know if that is proposed and pending or true since the budget.

[SDLT Geek]

Since the Autumn Budget on 22 November 2017 transfers of interests between spouses do not normally attract the 3% surcharge.

[djbolton]

Nothing to stop you doing step one though. Then you've both got the annual CGT allowance to play with when you come to dispose of it later. And her half of the excess capital gain will, as things stand at present, only be taxed at 18% and not 28%