Divorcing when you jointly own buy to let properties

by Readers Question

7:38 AM, 14th July 2014
About 6 years ago

Divorcing when you jointly own buy to let properties

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Divorcing when you jointly own buy to let properties

My husband and I are about to split up. We own a portfolio of buy-to let properties, with all of the houses in joint names. Divorcing when you jointly own buy to let properties

I am looking for any advice regarding the pros and cons of divorce.

My initial questions are:

  1. If we divorce, do we have to split the assets there and then, or can they stay jointly owned until we maybe decide to divide them later and/or sell them?
  2. Should we put them in a company instead?
  3. If we had to split them and put half solely in my name and half solely in his, would this cost a fortune in fees? ( I remember doing this once before – a change of title – years ago, and it cost £400 just for one property)
  4. As he is going to be soon moving out of the family home and into one of our BTL houses, will this mean that upon sale of the BTL house we will get a £40,000 tax exemption, plus the last 3 years increase in value being tax exempt?
  5. If this is the case, and we sold it after a year or two, could he, for example, move into another BTL house for e.g. 18 months and then do the same thing again? Or is this classed as tax avoidance? Would there be a better way of doing things?
  6. Do we have to be divorced to do all of this – I’m thinking we do, and that separation would not be enough for the Inland Revenue?
  7. The split is going to cost us enough anyway, what with now having to run two houses, so I’m just looking for ways to offset these costs in whatever legal ways we can.

I also appreciate that this is quite expert advice but the only time we went to a tax accountant before we paid over £3,000 for what turned out to be useless advice, so I’m trying to use this site as a first port of call, to maybe pick up some ideas of the best way forward financially.

Thanks in advance – any comments are welcome.


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Linda Lane

15:47 PM, 18th July 2014
About 6 years ago

Hi Mark. Glad you made some money just out of a question. I've got that magic touch when it comes to money 🙂
The reason I can't divorce is that we have so many Mortgage Express mortgages and I can't risk them calling them in, as we have a great income at the moment with the interest rates so low.
I'm not a romantic either when it comes to marriage and divorce - either way it's a piece of paper. I like to keep my eye on the money! And I know people say it can't be done, but we're both doing our best to keep it amicable. I'm in charge of the purse strings and we're neither of us big spenders, so I don't mind maintaining the status quo and continuing to share money. If things change I'll set up separate accounts and a joint business account.
I've also already had some great ideas of how to recoup the extra monthly expenses we're going to face running two households. My soon-to-be ex wouldn't previously agree to certain things - like extending some houses to increase capacity and to not use tenant-find services... but has agreed now as he doesn't want to be the cause of a drop in income.
Thanks for the advice regarding me selling the family home and going into a buy-to-let. You've given me food for thought and on balance I probably won't risk it. Thanks again.

Linda Lane

15:52 PM, 18th July 2014
About 6 years ago

Just another thing: can you think how the mortgage company would find out if one of us were living in a BTL house? (since we're not going to tell them)


11:21 AM, 21st July 2014
About 6 years ago

Never mind how they might find out - it's not worth the risk.

Also if you divide the properties between you'll each probably have to reapply separately for lending, which you might not get, notwithstanding the MX issue.

Eloise Hillman

11:29 AM, 21st July 2014
About 6 years ago

Has anyone read the HM Revenue and Customs Helpsheet 281 regarding Year of Permanent Seperation? To me it is ambiguous and confusing. It seems to imply that transfers of assets can still take place within the year of permanent separation without CGT liability.


15:30 PM, 14th February 2015
About 6 years ago

This is quite an old thread now but what about changing ownership from joint to tenants in common and continuing to own them together after divorce?


19:23 PM, 11th October 2017
About 3 years ago

Hi everyone,
Its been very difficult to find and article explaining what to do when going through a divorce owning more than one property.
Finding this post has given me an idea of what could possibly happen but i was hoping to get some help to get clarity in my own case before spending money paying a professional on an advice.
My husband and I are going through a divorce and we have a family home and a BTL. We also have a child together. The idea would be each of us keep one property but i cant find anywhere what converting the BTL into a 'family home' would entail.
So basically, we would split up, my son would still live with me and as we are both able to afford keeping a mortgage on our own the BTL house would then be 'transferred' to the other person who would then change the type of mortgage and become the sole owner of it. Each of us would become a sole owner of a property and happy ending!
However, as nothing is as simple as it sounds I really would be grateful if anyone could help me find out/understand the bumps we would possibly find to make this scenario come true.
Any advice/help that I could have in order to clear my head will be grately appreciated. I feel really stuck as my son is only six and I would like him to have the least impact with the split that he is already going to have. Otherwise, I would walk away and possibly leave everything behind to have a fresh start after seven years of an unhappy relationship. Apologies, for the stated drama!

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