How do I transfer ownership of my rental house into my wife’s name?

by Readers Question

10:01 AM, 27th October 2020
About 4 weeks ago

How do I transfer ownership of my rental house into my wife’s name?

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How do I transfer ownership of my rental house into my wife’s name?

I own a rental property which is now mortgage free. I would like to find out the easiest way to transfer ownership to my wife as she is a low rate taxpayer and I am not.

Do I need to instruct and pay a conveyancer, or can I do it all myself? I’ve noticed there’s a portal for doing this, but it seems to be only for businesses.

We are not businesses and simply rent out our old property and report such on our tax returns.

Thanks in advance for your help.

Best regards to all

Neville


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Comments

Neil Patterson

10:07 AM, 27th October 2020
About 4 weeks ago

Hi Neville,

I have spoken with Mark and he would suggest a Deed of Gift and transfer of legal title, because between a spouse and unencumbered there will be no CGT or Stamp Duty implications.

If you would like our legal team to give you a quote for this email neil@property118.com

Penny Lyon

10:48 AM, 27th October 2020
About 4 weeks ago

Hi I have just completed this same exercise with my husband. Our accountant recommended it for personal properties. Google form 17 and declaration of trust. its a simple and inexpensive process. I think you can even do it yourself. It allows you to nominate your % of beneficial interest. We have it split 90/10 and our tax is worked out on that basis. Hope this helps.

Ervin Breuer

10:56 AM, 27th October 2020
About 4 weeks ago

Hi Neil
I am in a similar position to Neville and would like my wife to become a partner in all my income, but all my buy to lets are mortgaged.
Have you got an easy idea how to accomplish this, if the answer is yes, then please give me a quote
Kind regards
Ervin

Neil Patterson

11:17 AM, 27th October 2020
About 4 weeks ago

Reply to the comment left by Ervin Breuer at 27/10/2020 - 10:56
Hi Ervin,

That would be much more complicated and we would need to complete full Due Diligence and fact finding to make any recommendations and assess options/costs.

A tax consulttaion can be booked from >> https://www.property118.com/tax/

Tim Rogers

12:12 PM, 27th October 2020
About 4 weeks ago

Reply to the comment left by Neil Patterson at 27/10/2020 - 10:07
If one does a "Deed of Gift" etc to your wife of a non mortgaged BTL property does any Capital Gains effectively get wiped out?
Ie Purchased for £100,000 20 years ago value at time of transfer £300,000, if the property was then sold after a couple of years for £320,000 would she be liable for CG on £20,000 or £220,000?

silversurfer2017

13:01 PM, 27th October 2020
About 4 weeks ago

Reply to the comment left by Tim Rogers at 27/10/2020 - 12:12
If it were that simple everyone would be doing it to legally avoid paying a big CGT bill! Although there is no CGT payable on transfers between spouses the wife is deemed to have bought the property at the original price of £100,000.

Tony Clements

7:52 AM, 28th October 2020
About 4 weeks ago

I own 50% of 2 HMO rental properties with my friend / business partner and wanted to do something similar last year as my wife no longer works so her allowance is unused. My accountant advised me that HMRC will treat it as either my income or if transferred as 50/50 income. Because of this I recently transferred 50% of my 50% on land registry. Should I have transferred all my share and been able to claim all the income in her name? Both properties are mortgage free so the transfer process is simplified.

brian clement

0:45 AM, 29th October 2020
About 4 weeks ago

I am planning to make a Deed of Gift to my son of my non mortgaged BTL property. Whole property consists of ground floor shop and flat and first floor flat. I am expecting to pay CG in normal way with new 30 day rule. Am I correct.

Grumpy Doug

17:21 PM, 29th October 2020
About 4 weeks ago

Hi Brian. Subject to a number of factors, you may wish to do as I am planning which is to transfer over the property to your son in chunks over a period of years, so as to use up your annual CGT allowance. An example may be as follows:
Property purchased for £200,000
Current value is £300,000
Capital Gain = £100,000
Given the current CGT allowance of £12,300, you can gift 12.30% of the property annually to your son free of CGT (over a period of 8 years). If you are married and own in joint names, you can gift 24.6% annually, therefore transferring it wholly in 4 years (give or take) free of CGT. Of course in this instance you and your wife would need to live for 11 years (4 years to transfer + seven) to avoid CGT.
CAVEATS!!
1) I am not an expert, just another landlord having to survive in the current climate. If you even consider this, please take expert advice
2) The above example applies to residential property - I have not taken into account the shop and I am unaware of specific considerations around the commercial component of the property
3) I am assuming no other capital gains during this period
4) I repeat, take advice
For more info., including retaining rental income, see-->
https://www.propertysecrets.org/index.php/2015/01/12/giving-away-an-investment-property-interest-and-keeping-rental-income/

Simon Williams

10:07 AM, 31st October 2020
About 4 weeks ago

Persons wishing to make an outright transfer of a property to a spouse where the property has no mortgage, should consult HMRC guidance on the creation of a bare trust, which they will read with pleasure because it really seems to be very simple.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9520

No need to transfer the legal title, or execute a deed or have witnesses etc. Draw up a simple document under which A declares a transfer of the property to B absolutely (ie without restriction) and the HMRC can "usually accept such a declaration." B has the beneficial interest and, says HMRC, is "entitled to the property and any income derived from it."

I would say the caveat "usually" will apply where HMRC consider the trust to be a sham e.g. where A transfers to B but A is still getting all the rents. Rents must go to B.

Don't take this as tax advice. Read the guidance for yourself. Personally, I don't think it could be clearer.

Note. If the property is mortgaged, that is a major complication. Stamp duty implications. Here I am only talking about transfers of unmortgaged property.

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