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Harris, Law Specialist
Category: Law
Satisfied Customers: 2851
Experience:  Family Law - Specialist in Divorce, Financial Relief and Children Matters
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I currently own a property in my name. I am planning to

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I currently own a property in my name. I am planning to buy a bigger one as this one is bit small for my growing family. I plan to rent out the current property and buy the new one where we plan to live. It will be me , my wife and my 9 month old son who will live in the house. I wanted to know if there is any added benefit if I buy the new house in joint name between me and my wife or should I buy it just based on my name to reduce the paper work. I have a limited company and I and my wife have 50% share in it. Currently the first property which I own and I plan to rent out is in my name only. I need to know if there is any benefit in buying the new property in joint name. Which one is more beneficial in terms of savings considering all financial aspects including tax and capital gains.
Hi, thanks for your question. I am a qualified solicitor.
If the property is to be used as the family home, you will need to elect it as your main residence so that it is exempt from CGT if sold in the future. However, your old property will be subject to CGT from the date it became a rental property.
If the new property is in joint names, it can be held in two ways:
1. Joint tenancy - whereby your wife will automatically obtain your share upon your death, and vice versa - there will be no inheritance tax to pay if you/she continues to live in it after death
2. Tenants in common - whereby you each own a share of the property and can be distributed as per your will or intestacy rules if no will in place. Inheritance tax will only be for assets above the £325,000 (current threshold).
In relation to savings to take place during your lifetime, I do not see there being any advantages of having the new family home in joint names.
You may wish to think about having the investment property in joint names (taking into account the above inheritance aspects) - as if it is held in joint names, then any rental income or tax will be divided between you and your wife and you could take advantage of each other's income tax brackets.
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