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Where Taxpayers and Advisers Meet

SDLT on BTL Property Transfer to Spouse

Satyboy
Posts: 3
Joined: Sat Aug 03, 2019 3:54 pm

SDLT on BTL Property Transfer to Spouse

Postby Satyboy » Sat Aug 03, 2019 3:59 pm

Hi, if anyone can please help with my question, would be very much appreciated

I have one BTL property which has always been in my name only, deeds and Mortgage. Property value is approx £230k with a mortgage of approx £120k. My spouse is a very low earner but I am higher, so I want her to show all or most of the income for income tax purposes. I was planning to transfer the deeds and mortgage in both our names rather than just me.

I have read that if I do an equity transfer, with tenants in common with spouse at a higher %, then I don’t need to pay income or capital gains, as it’s a transfer to a spouse. However, I have read that it will trigger SDLT.

I was hoping to avoid paying the SDLT if I can. I have been researching and reading lots of ideas, like gifting to a spouse / paying off the mortgage so it’s below £40k / declaration of trust, etc. However, I just can’t seem to find the right solution for me. Can someone help? Let me know if you need any further information from me. Many thanks

SDLT Geek
Posts: 172
Joined: Sun Apr 30, 2017 5:45 pm

Re: SDLT on BTL Property Transfer to Spouse

Postby SDLT Geek » Sun Aug 04, 2019 4:28 pm

A change made in November 2017 means that the higher rates of SDLT do not apply to transfers between spouses who are living together, even of an interest in a let property.

So you are looking at standard rates. As these start at £125k chargeable consideration, you should escape SDLT but will need to do a return.

Jerome_Lane
Posts: 16
Joined: Mon Jul 22, 2019 10:13 am
Location: Camberley, Surrey
Contact:

Re: SDLT on BTL Property Transfer to Spouse

Postby Jerome_Lane » Mon Aug 05, 2019 8:52 am

Depending on how the property is managed, you could consider other options. If you'd like to discuss, please DM me to arrange a call to discuss. Thanks, Jerome
Jerome Lane
Tax Advisor
jerome.lane@stewartco.co.uk
Stewart&Co.
Chartered Accountants
Telephone: 01276 61203

Satyboy
Posts: 3
Joined: Sat Aug 03, 2019 3:54 pm

Re: SDLT on BTL Property Transfer to Spouse

Postby Satyboy » Mon Aug 05, 2019 10:00 pm

Great, thanks very much for your reply SDLT geek. I was thinking of cashing in an endowment policy and paying off the mortgage, but it sounds like I don’t necessarily have to do that. I wasn’t sure if the chargeable consideration meant the most up to date value of the house, but if you are saying it’s the mortgage debt, then yes I am below the £125k threshold, so ok.

I am planning to ask my mortgage company to change the mortgage and house deeds to include my spouse, however I was going to ask if it can be done with a ‘tenants in common’ agreement, so that I can split the equity share say 90/10 % in favour of my spouse. I’m assuming this is the best way to achieve my objective, which is for my spouse to show majority of the rental income on her tax return rather than mine? I’ve read about ‘gifting’ and ‘declaration of trust’ not sure if there are other ways of doing this

SDLT Geek
Posts: 172
Joined: Sun Apr 30, 2017 5:45 pm

Re: SDLT on BTL Property Transfer to Spouse

Postby SDLT Geek » Wed Aug 07, 2019 8:43 pm

The chargeable consideration is any cash changing hands (zero presumably) and a proportion of the mortgage debt. So perhaps 90% of approx £120,000.


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