In a nutshell:
I own a rental property outright (no mortgage), which generates rental income of £12,000. The property is in my name alone. I am a 40% rate taxpayer, and my wife is a 20% rate taxpayer. I would like to transfer the rental income to my wife to take advantage of her lower tax rate.
I understand that benefit has to follow ownership, and therefore believe that I need to transfer part of the property to my wife, so that we can be set up as tenants in common with 99% of the rental income going to my wife, and 1% to me.
I've reviewed previous answers on this topic, and just want to make sure that the below is the correct process to follow:
1. Complete the Land Registry ‘transfer of part of registered title’ form TP1 to transfer part of the property to my wife
2. Set out the proposed share of ownership (i.e. 99%/1%) in a Declaration of Trust
3. File a Form 17 with HMRC within 60 days documenting the proposed share of income.
My questions:
- Is the above process all correct? Is there anything I've forgotten?
- Do I need a solicitor to help with the above forms? Would a conveyancing solicitor be best?
- Can this be reversed in future if, e.g. her pay increases, and there is no longer any reason to have the income in her name?
Many thanks in advance
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