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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hi there, Im 40% personal income tax payer and my wife has

Resolved Question:

Hi there, I'm 40% personal income tax payer and my wife has no income. We have a property currently only registered under my name and we plan to let it out. The mortgage lender says they don't mind adding my wife to the deed. I'd like to know what's the most cost-efficient way to reduce our rental income tax. Your suggestions are hightly appreciated.
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

I'm afraid there is no magic bullet solution.

If the property is in joint names, the rental income should be split on a 50:50 basis unless it is actually owned in proportions other than 50:50 and you inform the tax office using a form 17. You would also need to provide proof that the property is owned other than on a 50:50 basis.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.


Thanks for coming back. Here is what I asked my solicitor to do:


1> add my wife to the ownership so that she owns 99% and I own 1% of the property

2> my wife and me sign a Declaration of Beneficial Interest stating that my wife and me hold the property on trust of each othe with my wife has 99% beneficial interest and I have 1%

3> send a Form 17 to HRMC within 60 days of the declaration


Pls could you tell me is step 2 necessary i.e. would it be sufficient to just add my wife to land registry 99:1 to me and send the Form 17, or do we need to do the Declaration of Beneficial Interest. And where to get Form 17?


Thanks and regards

Jack
Expert:  TonyTax replied 3 years ago.
My understanding is that the Land Registry entry does not show the specific beneficial interests so you will need a declaration to send to the tax office.

You can download form 17 from the link I gave you in the previous post or from here.
Customer: replied 3 years ago.


That's great, so I do need to complete the three steps. Do you know if I need a solicitor to do anything with the declaration, or can we just download some template and sign and send to HRMC?

Expert:  TonyTax replied 3 years ago.
You can use a template instead of paying a solicitor but your own and your wife's signatures will need to be witnessed.
Customer: replied 3 years ago.

That's great. I guess now down to my last question. In Form 17 last section it says:


• Send this completed form to your tax office within 60 days of the date the declaration was made.
• Send evidence of the beneficial interests you have declared.
• Tell us immediately if your circumstances change.


 


The second point the evidence of the beneficial interests you have declared, does that mean the copy of the declaration or something else.


 


Later on, if say for capital gain or whatever reason I want to change the beneficial interest share, can i resend the form 17? Any limit how many times I can change?


 


Many thanks.

Expert:  TonyTax replied 3 years ago.
You should send an originalof the declaration to the tax office so you should have two or three or four signed originals. You never know when you might need them.

There isn't a set limit but you might change the beneficial interest some time before you decide to sell and not the day before.
Customer: replied 3 years ago.

Do i also need to send the copy of the deed as evidence too? Last question where I should send Form 17 to, as I filled the self assessment online.

Expert:  TonyTax replied 3 years ago.
The deed will be your proof of the other than 50:50 beneficial interests so it should be sent to the tax office.

Send the form 17 and the deed to the address near the bottom of the HMRC webpage here.
Customer: replied 3 years ago.


Hi Tony, sorry I went to sleep last night. You've been very helpful so far. I've tried to find the template for declaration of beneficial interest online but didn't find suitable one, by any chance you can give some link?


 


Also how to get it witnessed? I.e. who can witness, and is it just the case the witness also needs to sign the document, sorry if this sounds stupid but i've never done this kind of thing.


 


I guess after these questions, I shall have no more questions. Pls kindly let me know. Many thanks.

Expert:  TonyTax replied 3 years ago.
I don't have a template I'm afraid. I will look around myself and let you know what I find.

As far as I'm aware, the declaration can be witnessed by a friend, a work colleague, any adult who has all their faculties about them but you might check with a lawyer.
Customer: replied 3 years ago.

Thanks Tony, pls let me know if you have found the template. If not, pls also let me know so that I will try to get it from my solicitor.


 


Regarding the witness, the answer is only partly what I am after. In fact, I'd like to know how to carry out the "witness" process. Please let me know if the following is the right sequence:


1> prepare the declaration documents and signed by both me and my wife


2> ask the witness person to give signature and his/her ID?


 


Is that it? I really want to know how to do it, that's what I meant.

Expert:  TonyTax replied 3 years ago.
I've not been able to find anything I'm happy to recommend and you might be better off getting something from your solicitor.

There are some notes on the HMRC website on declarations of trust here.

I'm no lawyer but when I've had to sign witnessed documents, the witness has had to be present at the time I signed them.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15835
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thank you !

Expert:  TonyTax replied 3 years ago.
Thanks and good luck.

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