Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
We have a particularly complex situation even though we have only two rentals. The timeline is important so I am setting this out first.
2002 – I purchased a flat to live in for £60K
2005 – My partner moved in (not married at this time)
2008 – We moved out to a rented house (for school reasons) and let the flat out.
2012 – we jointly purchased our current house for £250K (in poor condition)
2015 – we jointly purchased a holiday let in Florida for $159K with a $101K mortgage
The rental flat is currently worth £140K
The US house $180K
Our main residence – £365K
I am higher rate tax payer
My wife is not a tax payer
In the short term the obvious tax efficiency move appears to be transfer the rental flat to my wife, but I want to keep the same mortgage (still in my name only but very cheap). I have no concerns over trust or relationship issues.
The bigger question comes in around 24 months. We want to move to a larger house, budget of £600K but the extra £18K for higher rate SDLT is not a pleasant thought. As owning both the rental flat and the US property would mean the higher rate SDLT we not sure how to best organise this.
We have the benefit of PRR and Letting Relief if we transfer the rental flat to a limited co. The SDLT would be minimal if not avoidable.
If the rentals were both UK I would be looking further at incorporation, but I am not sure this works for us with the US property.
We may expand our rental portfolio later on.
Any input greatly appreciated.
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