Beneficial Trust to wife now tax is going to bite?

Beneficial Trust to wife now tax is going to bite?

8:06 AM, 2nd March 2016, About 8 years ago 17

Text Size

With restrictions mortgage tax relief coming in I will end up with income well over £100,0000. All my properties are currently in my name. Am I right in thinking I should make a declaration of trust giving my wife a proportion of my income and file form 17 to HMRC to do so. trust

I believe this is the easiest way to go about things. As the trust is with my wife rather than say a company reading between the lines it looks that it is best to keep it between us and HMRC and not inform mortgage lenders.

I appreciate that may be against their T&C’s but I believe it is common practice when trust is only between you and spouse. I presume SDLT is still payable on the loan secured on property and so therefore need to do before April so as to have zero liability.

Any advice greatly appreciated especially how common this is and whether mortgage company informed

Thanks

Steve


Share This Article


Comments

David Mensah

14:51 PM, 6th March 2016, About 8 years ago

I see the message above about getting professional advice, but the consultation about 3% SDLT on residential is not yet closed, so I'm happy for unprofessional opinions on the following:

If you already own a letting property with a non-spouse & transfer some fraction of ownership through a declaration of trust , will this attract the extra 3%?

David Mensah

14:52 PM, 6th March 2016, About 8 years ago

to Steve:
Note that inter-spousal transfers (if they are gifts) are not subject to CGT and also not to SDLT as long as there is no consideration (i.e. it is a true gift so that effectively no money or liability changes hands). Be careful when there is a shift of mortgage responsibilities ... see http://www.taxcafe.co.uk/resources/stampdutytrap.html

Itchy Scratchy

17:01 PM, 5th April 2016, About 8 years ago

Following up on this. If a property in the husbands name is 99% gifted to the wife using a DoT of Beneficial Interest can the wife claim the mortgage interest as an expense on her tax return. i.e. she actually pays this using the money made from the rent but the mortgage is still in husbands name?
Bill

Lee Nutter

3:24 AM, 6th April 2016, About 8 years ago

Reply to the comment left by "Neil Patterson" at "02/03/2016 - 08:09":

Hi. I'm in a similar situation and have attempted to contact these people, (buytoletconveyancing) several times, as has my wife. But there's no response - no out of office, not even any recognition that your email has been received. We had a fair bit of business to put their way but I don't feel like I should be chasing them to give them money. Absurd. You guys needs to sort this out. Appreciate its busy with all the stamp duty nonsense but if I ran my business this way, well... I think you get this gist.

Neil Patterson

8:20 AM, 6th April 2016, About 8 years ago

Reply to the comment left by "Lee Nutter" at "06/04/2016 - 03:24":

Hi Lee,

I will draw their attention to your comment and double check with them that they received your enquiry. Please accept my apologies in the mean time.

Neil Patterson

8:31 AM, 6th April 2016, About 8 years ago

Reply to the comment left by "Lee Nutter" at "06/04/2016 - 03:24":

Hi Lee,
I have found your original enquiry and copied you in to my email to our solicitors.

Sunny K

10:57 AM, 6th April 2016, About 8 years ago

Hi Lee,

We had similar issues with them. Ultimately I got through a partner Paul Sheerin. He told me they had a new IT system and had lots of issues like this. I have since had good service from them. They are quite facile with transfer, covenant and legal issues around flat conversion. I have again found good professional services via this website. Thanks Mark Alexander and Neil Patterson.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now