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Aston Lawyer
Aston Lawyer, Solicitor
Category: Property Law
Satisfied Customers: 10585
Experience:  LLB(HONS) 23 years of experience in dealing with Conveyancing and Property Law
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My wife and i own 7 buy to let properties. We have reached

Resolved Question:

My wife and i own 7 buy to let properties. We have reached an age where we want to dispose of them in an a structured manner. We intend to sell them over the coming tax years to use annual capital gains tax (CGT) allowances. My issue is that the properties were bought in my wife's name with mortgages in her name only. The deeds have only her name on. I want to use both our CGT allowances and have looked at ways of allowing this. I have read we can add my name to the deeds of the property on the day of sale to make it joint ownership and this would allow us both to claim CGT allowances against the sale. My questions are - can it be done?- is this correct and an idea of how complex/costly it is?
Submitted: 1 month ago.
Category: Property Law
Expert:  Aston Lawyer replied 1 month ago.

Hi,

Thanks for your enquiry.

You are correct in that the Deeds for the 7 properties need to be in your joint names to enable you both to utilise your CGT annual allowances.

The problem you have is that the properties all have Mortgages on them. Hence, before any of them can get transferred into joint names, your Wife will need to approach each Mortgage Lender for their consent to transfer the Deeds into joint names, and they will only consent if the Mortgage is also transferred into your joint names (usually by way of them issuing a new Mortgage Offer).

The legal cost for dealing with each Transfer is likely to cost approx. £600 plus VAT, and the Lender will also normally make an admin fee of approx. £200.

On top of this, there is also a Stamp Duty issue. Each Transfer will be subject to Stamp Duty at the enhanced rate, in that if your Wife transfers the property into your joint names, you are deemed to be paying consideration equating to the value of one half of what is outstanding under the Mortgage (you are assuming the debt of half the Mortgage). So, for example, if 1 of the properties has an outstanding Mortgage of £100,000, you will be deemed to be assuming a debt of £50,000, meaning that Stamp Duty of £1,500 will be payable (the rate is 3% up to £125,000 and then 5% up to £250,000).

With this in mind, it may not be a financially worthwhile exercise!

I hope this assists and sets out the legal position.

If so, I would be grateful if you could rate my answer in the top right hand corner of your screen.

Kind Regards

Al

Customer: replied 1 month ago.
Its my fault as did not say, only 2 of 7 still have mortgages. I understand this as the answer/scenario for mortgaged properties what about mortgage free properties? Can we add my name to the deeds on the day of sale and use both CGT allowances against the sale and approximately what might this cost? Thanks
Expert:  Aston Lawyer replied 1 month ago.

Hi,

As regards ***** ***** free properties, you can indeed transfer them into joint names. No Stamp Duty would be payable.

However, you would need to do this well before the day you complete the sale. This is because your Solicitor will need to prepare a Transfer document which is signed by the two of you, and then get it registered at the Land Registry. It normally takes the Land Registry a good week/2 weeks to register the Transfer.Once the Deeds have been updated, the Sale Contract can then show you and your Wife as the Sellers.

I would therefore suggest that you speak to your Solicitor as it would be a good thing to get the Transfers into joint names completed just before you then put the appropriate property on the market.

I hope this helps.

Kind Regards

Al

Customer: replied 1 month ago.
Ok thank you
Expert:  Aston Lawyer replied 1 month ago.

Thanks.

I would be grateful if you could rate my answer in the top right hand corner of your screen, so I may get credited for my time.

Best Wishes

Al

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