Moving properties to my wife to save tax

Moving properties to my wife to save tax

19:00 PM, 30th May 2017, About 7 years ago 7

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I’ve got five buy to let properties all in my sole name which I’ve had for around 6 years and they are mortgaged on an interest only basis. Due to the change in mortgage tax relief and the fact that I’m a 40% tax payer earning around £100k a year I’d like to transfer the income from the properties over to my wife.

We have been married about a year and she has no income. 

This would keep me under the £100k earnings and I’ll keep my income tax allowance and gain us 20% extra mortgage tax relief.

What’s the easiest way to achieve my goal?

A declaration of trust to give my wife 99% of the income?

I understand if we remortgage in my wife’s name I’ll have to pay 3% stamp duty which obviously I want to avoid.

Many thanks


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Mark Alexander - Founder of Property118

19:05 PM, 30th May 2017, About 7 years ago

Hi Steve

Declarations of Trust would indeed be the best way to proceed. However, whilst gifts between spouses are exempt from both CGT and Stamp Duty, the transfer of mortgage liability via the Declarations of Trust is treated by HMRC as a consideration for SDLT purposes.

The workaround is to transfer the beneficial interest of a lower percentage of the mortgage value in order to stay below the £40,000 SDLT threshold. You can then form a partnership and obtain a partnership Unique Tax Reference number from HMRC. The benefit of this is that profits can then be allocated disproportionately to profitability. Your commercial justification for this is that your wife takes full responsibility for the rental business on the basis that you have other full time employment, which means you are not immediately contactable. The partnership profit shares are then transferred to your individual self-assessment returns.

Property118 Limited can produce the necessary documentation for a fee of £250 plus VAT per property. We can also provide you with the forms required to register the partnership and the partners with HMRC.

Please let me know if you would like to instruct us on this basis. We will require full addresses and postcodes of the properties, copy passports or driving licences for you and your wife and a bank statement or utility bill showing your home address, which is dated within the last three months. The latter is required for compliance purposes.

I have also responded directly to you via email.


10:56 AM, 31st May 2017, About 7 years ago

Hi Steve, i am in a similar position and the bigger problem i have experienced is the mortgage companies will not approve the mortgage being moved to my wife so you need to check that out before spending any money on anything else.Good luck

Mark Alexander - Founder of Property118

11:35 AM, 31st May 2017, About 7 years ago

Reply to the comment left by "ED SHIRMAN" at "31/05/2017 - 10:56":

Hi Ed

Unless your mortgage lender is CHL I very much doubt that is actually the case because very they are the only lender we know of where mortgage T&C's preclude the transfer of beneficial interests.

If the lenders terms and conditions make no mention of transferring beneficial interests then their consent isn't necessary. Lenders will decline consent to pretty much anything if they don't understand it. Try seeking consent to have a bonfire in your garden and you will soon see for yourself if you don't believe me. Some mortgage brokers suggest that you should seek consent but one must question their motives for this given that they already know what the answer will be. a cynical view might be that they want your remortgage business!

Even if you are with CHL a commercial view can still be taken. The worst they could do is give notice to call in the loan on the basis of breach of contract if you were to intentionally breach their mortgage conditions. However, there has never been a successful case in the UK where a lender has been allowed to reposes a property on the grounds of beneficial ownership having been transferred. Your commercial decision may also factor how your lender would ever find out. The transfer of beneficial interest in individually owned properties is an entirely private matter and neither the trustee nor the beneficiary are compelled to record the matter publicy, e.g. by placing a recording a restriction at HM Land Registry, this is a personal choice.

Parm Lal

10:59 AM, 2nd June 2017, About 7 years ago


Is stamp duty payable If husband and wife who jointly own a BTL decide to change it to tenants in common with a declaration of trust to allow all income and mortgage debt to be assigned to the wife, and submit an S17?

Mark Alexander - Founder of Property118

11:28 AM, 2nd June 2017, About 7 years ago

Reply to the comment left by "Paul Singh" at "02/06/2017 - 10:59":

Possibly, it depends on whether or not there is a mortgage, the outstanding value of that mortgage and the percentages transferred. Please see my previous replies.

Steve McNair

14:18 PM, 31st October 2017, About 7 years ago

Hi Mark

I posted the original question regarding moving my buy to let properties over to my wife to save on tax due to the new tax changes. I've not done anything regarding this as yet due to being a bit ignorant of the banking and accounting side of things once I'm on my own with it after the initial set up.

My accountant does my tax return ( and he has no knowledge of property buy to let tax ) my wife doesn't do a tax return as she has no income ( she is a little nervous of this side of things ) at the moment the mortgages and rental come into a business account in my sole name, would adding my wife to this account be the easiest way forward with banking?

As for tax returns I would certainly need hand holding in the first year in knowing how to put things together for the accountant ( or could I complete myself with guidance )

Again thanks for your help


Mark Alexander - Founder of Property118

14:30 PM, 31st October 2017, About 7 years ago

Reply to the comment left by Steve McNair at 31/10/2017 - 14:18
Hi Steve

What is the point of employing an accountant who doesn't understand the business sector you're operating in?

If you book a consultation with me I will be pleased to provide you with all the guidance you require in terms of setting up the optimal structure, and then to refer you to an accountant who understands property and can help you on an ongoing basis.

Please see the link below.

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