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bigduckontax
bigduckontax, Accountant
Category: Tax
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I bought a flat in 2006 but married my wife in 2009. The

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Hi
I bought a flat in 2006 but married my wife in 2009. The title deeds and mortgage are in my name alone. I am a higher rate taxpayer with an income of £76,000 per year. My wife is a lower rate taxpayer with an income of £23,000 per year. We have just bought a second home together and are planning to rent out the flat from mid-August. I would like my wife to collect the rent from the flat so we would only have to pay lower rate tax on any income generated.
I have heard of tenants in common documents that would allow me to make the flat 99% hers and 1% mine but her name isn't on any documents pertaining to the flat since it was bought before we married but am I right in thinking that since we are married and have lived together there since 2006 she has an equal share in the property?
Cheers
Jonathan
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello Jonathan, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

You are not correct in thinking that she has an equal share in the property simply because you married. You are still the 100% owner. You could enter into a conveyance which would make you Tenants in Common on the basis you suggest. No taxation is due on such a transfer as it is inter spousal and outside the scope of UK taxation. Once this transfer is made then the rental can be split as per the ownership percentages.

Remember a married couple can only have one residence between them for Private Residence Relief (PRR) (although they both receive the financial benefits of the relief) so you might find it prudent to elect for the second home to be so designated. This election is only available within two years of the acquisition of a second residence. Of course this all depends upon which home the most gain is likely to occur.

I do hope that you have found my reply of assistance.

Customer: replied 1 year ago.
Hi KeithThanks for your reply. So just to confirm - my wife and I would be able to divide our equity of our flat in a 99% (to her) and 1% (to me) manner by using a Tenants in Common. We would not be liable for any Stamp Duty Land Tax by doing this?We feel that our new home (which we've moved into) would be best designated for primary residence relief and were only really looking at controlling the tax exposure from the rent...Just wanted to be clear that we could do that.CheersJonathanPS. Hope the weekend weather has been good to you too!
Expert:  bigduckontax replied 1 year ago.

SDLT is based on the consideration passed and in this case there is no consideration thus no SDLT.

You have two years from purchase to elect your new residence for PRR.

Please be so kind as to rate me before you leave the Just Answer site, Jonathan.

Weekend weather does not apply. I am answering you from a time zone 6 hours ahead of BST and it is hot and sticky, monsoon season!

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for yur support.