Remortgaging / restructuring questions

[paulstafford]

Good morning all

Long time lurker, first time posting. Like many I have a rental portfolio that has expanded over time that, with hindsight, could have been structured in a more tax efficient way. Whilst I made what I felt were the best decisions that I could at the time, I am now looking at a reshuffle to put things in better order. A couple of questions have arisen in my mind and I would be grateful for your input please.

1) If I were to remortgage a rental property that is owned in my name and use all of the funds raised to the reduce the balance of a rental property held / mortgaged in my wife's name, can I still legitimately claim tax relief on the resulting interest? My logic for doing this is that there are tax benefits to us in transferring mortgage (interest) costs to me from her, as I pay a higher rate of tax than she does. I am obviously aware of the current changes phasing in. All of the remortgage funds would be used for this sole purpose. I am unsure whether it would be frowned upon that I have generated interest costs for myself that are being used to pay off something for someone else, even though it is my wife and her own balance/ interest costs would be reduced.

2) If myself and another relative each own 50% of a property outright (no mortgage), but I am considering restructuring my portfolio as a limited company, is it possible for my limited company to purchase my share, whilst the relative retains ownership of their share as an individual? This would mean split ownership of the property between a company and an individual, which I am unsure is possible.

Many thanks in advance

[AdamS93]

1) The answer to question 1 depends - see example 2 here https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45700

2) This would be a question for a solicitor but I do not see any reason stopping this - However, I cannot see many benefits of transferring a mortgage free property to a limited company

I would go and see a local tax adviser/accountant if I were you.