Best tax relief for letting current property

[NathanC]

We are in the process of moving to a new house and letting out our existing property.

Currently, the deeds of our existing property are in both our names and so will the new property.

In the near future, I may become liable to pay the higher rate of tax.

If we put original property in just my wife's name, could any profit (after mortgage interest relief etc) be taxable on just her tax rate?

[Nigel Lord]

Nathan

There is a simple solution. You only need to sever the joint tenancy and gift the beneficial ownership and entitlement to income to your wife by way of a deed of gift. This is relatively inexpensive and tax efficient.

As it is impossible to separate the beneficial ownership and entitlement to income for married couples, this effectively means giving the other half of the property to your wife. Part of the gift can be transferred back in the future if circumstances warrant this, or to ensure that your CGT annual exemption is not wasted.

If you require assistance to put this strategy in place please do not hesitate to contact me.

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk