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Where Taxpayers and Advisers Meet

Division of beneficial interest

glyndwrsimpson
Posts:1
Joined:Tue Oct 30, 2018 6:13 pm
Division of beneficial interest

Postby glyndwrsimpson » Tue Oct 30, 2018 6:26 pm

I recently bought out my ex wife from a flat we both owned. I have had to remortgage the property in my sole name to do so. I have now remarried and the flat is let as an assured tenancy and my intention is that my new wife should derive the full benefit of that income and not me.
I am somewhat confused as to if I need to use a Form 17 form at all as this only refers to property that is jointly owned in some way.
The legal title is in my name but the Tenancy is between my new wife and the tenants not me.
The income goes into my new wifes account not mine.
On that basis therefore should I draw up a declaration of beneficial interest and if I do do I need to tell the HMRC or anyone else. My accountant is not sure either, Help

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Division of beneficial interest

Postby AGoodman » Wed Oct 31, 2018 11:05 am

The unhelpful advice would be that you should not start from here as your wife has no interest in the property but has granted a tenancy. That's not something she can do as she has no interest in the property. Strictly speaking (ie in fact) all the rent currently being paid belongs to you.

One route would be to transfer the legal title to the property to her now. That would legitimise it practically, although not for rent that has already been paid. I assume that isn't an option because of the mortgage.

The only practical solution is for you to to declare yourself a trustee for her as 100% beneficial owner. That would firm it up but strictly speaking the legal owner (ie you) should still be the one granting the tenancy. You would collect the rent on her behalf and it would be hers for both legal and tax purposes.


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