transfer of equity

[Kirstie]

my husband has a property which was bought purely as a BTL (purchase price 165k). the mortage (approx 132k) is also in his name only.

i understand that we may be able to do a "transfer of equity" in order to put 50% of the property in my name so that if at some point in the future we sell then we can benefit from both our CGT allowance. property's current value is approx 275k.

are there any other tax implications we should be aware of? eg should we have a joint mortage rather than it still being in his name (so my 50% of rental income is offset against 50% of mortage interest)? are there any stamp duty implications 1) we keep mortage in his name or 2) change to joint mortage?

we are unlikely to sell in the near future but is there an "acceptable" time limit for HMRC between effecting the transfer and selling the property?

[Peter D]

Yes for joint ownership the mortgage may have to be changed and as a result of the 'Tenants in Common' ownership the rental income should also be shared in the same proportion 50/50 bf default and hallf the mortgage interest offset against the gross income.. As you are married there are no SDLT implications as the transfer will be as a no loss no gain transaction. Once the papers are in place HMRC will be happy with with any dual CG allowance offset on the sale. Regards Peter

[CDavey9501@aol.com]

I think Peter means CGT rather than SDLT.

To clarify, there is no stamp duty because it is below the threshold.

[King_Maker]

The mortgage is not really a problem, as HMRC are not that concerned about a single mortgagor for jointly owned (between spouse/Civil Partners) properties.

Also, even if above the SDLT threshold, it should be possible to draft the appropriate Trust Deed.

There is no need for the split to be 50:50, especially if one owner is in a lower tax band - but Form 17 will have completed and sent to HMRC within 60 days, if the split is to be uneven.

[Peter D]

Thanks CDavey, spot on. I have had a very strange day today with far to many telephone calls from and to HMRC. King_Maker I mentioned the mortgage because often they do not like joint a mortgage without joint ownership. Regards Peter