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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I am considering buying a property which includes a four bedroom

Customer Question

I am considering buying a property which includes a four bedroom detached dwelling and a detached single bedroom dwelling on the same land. They are currently offered for sale as a single unit at £375k. I am considering purchasing the property and renting the smaller dwelling. I would like the smaller dwelling to be solely in my wife's name (she doesn't work) and putting the larger dwelling in joint names. Both dwellings share gas, electric and water supply.
1. Would the rent then coming in for the smaller dwelling then be tax free as my wife has no earnings (rent would be approx. £400 per month) ?
2. What is the approximate cost involved to split the properties and how would I go about this ?
3. If the larger property is then sold for £250k and the smaller property for £125k I assume that only stamp duty would be payable on the larger property ?
4. If I rent the smaller dwelling as inclusive of all gas, electric and water would I need separate meters or supplies installed for utilities ?
I look forward to your reply.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

1. It is considered income but would be below the tax threshold.

Alex Watts :

2. Sadly I cant say what the cost is - you need a builder for that, not a lawyer!

Alex Watts :

3. Yes

Alex Watts :

4. No, you would not need to meter supplies if its a fixed amount each month. If it varies on usage then yes you would need 2 meters

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

Hi Alex,

Alex Watts :

Hello

Customer:

Thanks for the reply.

With regard to my question 2, I am sorry because I didn't make it clear. The properties are on the same land and registered together, they would need land registry changes and boundaries organised, it is an approximate cost for this that I was after.

Customer:

The buildings are totally separate and there is an easily defined boundary of a wall which currently has a gate between the 2.

Alex Watts :

Oh I see, about £250 through a Solicitor I would say

Customer:

Sorry about the confusion. Although this could be construed as tax avoidance, I assume that it is legal, the main reason is for my wife to have an income, obviously the split would need to be done by the current owners before we purchased if we are to save on the stamp duty ?

Alex Watts :

Yes it is legal. It would need to be done by current owners yes

Customer:

Excellent.

Thank you for your help. I guess that any local solicitor would be able to help with the splitting of the properties ?

Ash and other Law Specialists are ready to help you