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What you have been told by your solicitor is absolutely correct.
The usual way of dealing with this would be for the two of you to form a limited company and be shareholders directors of the limited company and then transfer the freehold of the property into the limited company. I don’t know what the tax position is that precludes you from doing that.
If the lender wants the freehold to be in both your names and each of the leaseholds to be in both of your names, then the lender is asking for an impossibility.
You could have the leasehold in either of your names and the freehold in joint names or you could have the freehold in either of your names and each of the leases in joint names.
Can I clarify anything for you?
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I don’t think that argument for capital gains tax applies. You are not transferring for a gain, but for a nominal sum. In any event, it depends on the value of the freehold which is usually not that much. Even so, you would normally be transferring it for 1 pound. How you take advice from a tax expert on this?
You simply cannot do what you are doing. As soon as the properties come back into common ownership, it extinguishes the leases. It may satisfy the lender (whether you have been speaking to the lender clearly does not have the basics of English landlaw) but it makes the properties unsellable. I would suggest that you ask whoever you have been speaking to at the lender, to refer this on to their legal department. That request would be better coming from your solicitor. The solicitor can explain the way the law works and hence ask for it to be reviewed by one of the lenders solicitors.
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