Basis of Ownership – Tax Planning advice needed

Basis of Ownership – Tax Planning advice needed

10:27 AM, 14th May 2014, About 7 years ago 3

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I’m looking for some guidance as per the above. My wife and I are in the process of buying a 2nd property. The 1st property is owned as tenants in common. We are both lower rate tax payers. My wife has the potential to become a higher rate payer at some point (not sure when) so I started to look into this. Would anyone be able to confirm I am on the right track if we proceed as follows: Basis of Ownership - Tax Planning advice needed

1) 2nd Property purchased as Tenants in common but with a note on the land registry file regarding an uneven split of ownership (conveyancer has advised this is the only info needed, ie no further detail on the % split)

2) “Trust Deed” (conveyancers term) is then drawn up by the conveyancer and signed by my wife & myself to state actual % split

3) Suggested split relates to the beneficial interest in the property so if 75% me & 25% my wife, expenses and income are split the same way

4) How do we change the ownership % for property 1? (is Land Registry involved?)

Are there any other points to consider or anything overlooked that could affect this?

Thanks in advance for any info.

Simon



Comments

by Mark Alexander

10:33 AM, 14th May 2014, About 7 years ago

Hi Simon

It's not easy to find a good conveyancer who also understands landlords tax planning, I think you have achieved that so well done 🙂

Please ask your conveyancer to make contact with me to discuss becoming a Guest Author on Property118 by pointing him to this page >>> http://www.property118.com/business-sponsorship/

You should also get yourself a decent accountant who also understands property investment. This will prevent you making the 10 most common mistakes - please see >>> http://www.property118.com/landlords-tax-returns-10-common-mistakes/61630/

In answer to your 4th question, your conveyancer will be able to advise you on this too. It's not difficult and it's not expensive you will be pleased to hear 🙂 If you were not married there could be a CGT issue but as you are married there wont be because transfers between spouses are CGT exempt. Do ask you conveyancer to advise you of any potential stamp duty issues though.
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by Sarah Rivers

12:24 PM, 15th May 2014, About 7 years ago

Hi Simon
I'm looking at the exact same thing now. One further point to note is that you will also need to complete an HMRC form 17 and send it with proof of % ownership to HMRC.
Kind regards

by Jason Holden

13:33 PM, 17th May 2014, About 7 years ago

You don't actually say anything about longer term needs, it is entirely possible that a Limited company structure could be appropriate to your longer terms goals and you are not actually buying your rental properties in the right way anyway.

You really can't skip the step of using and getting professional advice, even though so many do.

Jason


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