Hi,
I own a rental property with a 70%LTV mortgage on a property worth less than 150K. Via a trust deed I intend to transfer equity to my daughter such that she owns and receives income on 45% of the property. Mortgage liabilities are not to be transferred. I understand such a transfer to be stamp duty exempt (but CGT may arise). Now, the question is would it be allowable to keep the mortgage at 70% LTV when I only own 55%, or am I obliged to pay it down to 55%? Even on 55% of rental income, I can easily service the 70% LTV mortgage and have a small profit, but is it objectionable from a taxation standpoint?
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