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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10456
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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My wife and I will be temporarily letting out our house which

Resolved Question:

My wife and I will be temporarily letting out our house which currently is owned only by me, with only me named on the mortgage. I am a higher rate tax payer while my wife currently pays no tax as she has no income. Would it be legal to transfer the house over to my wife and declare the rental income as hers? How would this affect the mortgage? Could she become the legal owner without affecting the mortgage?
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.
Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
You are legally entitled to transfer the property to your Wife at any time. However, the stumbling block is your Mortgage, in that your Wife would also have to apply to have the Mortgage transferred to her.
This is because all Lenders require that the Owner (and every owner) of the property is also on the Mortgage.
If this is going to be possible due to her financial means, you could always transfer the property and Mortgage into joint names, in order to save 50% income tax on the rent, if this is going to be worth it.
I hope this assists and sets out the legal position.
Kind Regards
AL
Customer: replied 2 years ago.

So could the mortgage be in joint names but the property deeds just be in my wife's name? Would that make it legal for my wife to declare the rental income as her income only so I don't need to declare it? i.e. How would HMRC expect the income to be declared, based on the name(s) on the deeds or the mortgage?

Approximately how much would it cost for a solicitor to change the deeds? I guess I may need to balance that cost against potential income tax savings. The rental will likely be for 18 months.

Expert:  Aston Lawyer replied 2 years ago.
Hi Lee,
Afraid that whoever is on the Deeds need also be on the Mortgage and vice versa.
If you do proceed and transfer the Deeds and Mortgage into joint names, you can then also sign a separate Trust document to say for example, that your Wife owns a 99% share and you a 1% share 9this document can then be produced to HMRC and making it more beneficial for tax purposes).
As regards ***** ***** involved, your Mortgage Lender is likely to make an admin charge (£100-£200), your Solicitor is likely to charge £250-£350 plus VAT and there will also be a Land Registry fee, based on the value of the property and which would be between £40-£90.
Your Solicitor may or may not charge you an additional £50-£100 for the Trust document.
You do therefore need to weigh up whether it is financially worthwhile.
I hope this helps.
Kind Regards
AL
Customer: replied 2 years ago.

OK so with this Trust document I could declare 1% of the rental income and my wife 99%, and this would be completely legal?

Expert:  Aston Lawyer replied 2 years ago.

Hi Lee,

Sorry for the delay.

Yes- you can hold the property as Tenants in common, which means you can declare what percentage share you own in the property, so it is perfectly acceptable for you to hold it 99%/1%.

I hope this helps.

Kind Regards

AL

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