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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hi. We are looking to sell our home and buy another of potentially

Resolved Question:

Hi.
We are looking to sell our home and buy another of potentially lesser value in order to release some equity. My partner only works P/T and earns c£7k p.a. If we release enough equity to fund a deposit on a buy to let property what is our best course of action in terms of maximising her tax allowance and the income from the property? Would it need to be solely in her name and then put our family home just in my name in order to keep things simple? If she/we were to move into it a some point in the future so that it became our/her main residence, will this negate CGT?
Our ultimate aim is to purchase a property over the next 15 years that we can sell/pass on to our children to give then a better start in life. Is there any benefit in going for an interest only mortgage rather than repayment, considering our circumstances?

Regards
Andy
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

If you want your wife alone to be taxed on any rental income, the property will have to be in her name alone. A married couple who jointly own a property which is let will each be assessed on 50% of the net rental income unless the property is actually owned in proportions other than 50:50 and the tax office is informed on a form 17.

There would be no reason to put the family home in your name alone. A married couple can only have one main residence between them at the same time. Living in the property as your main home will reduce your CGT exposure but may expose your other home to CGT if you sold it. It all comes down to the facts and figures of the case. See HS283 for information on dividing a gain between the tax free and the taxable parts.

I've answered the mortgage type question in another of your questions.

I hope this helps but let me know if you have any further questions.
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