Ownership Split

by Readers Question

9:19 AM, 30th January 2017
About 2 years ago

Ownership Split

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Ownership Split

Ownership Split

I am in the process in remortgaging my buy to let property and I am also in the process in adding my wife as 50:50 ownership split.

I wanted to know what is the maximum split I can give my wife? My wife is a NIL tax payer.

Thanks,

Kais

Reply from Mark Alexander – founder of Property118.com

Hi Kais

There are two ways to own property. The most common is “Joint Tenancy”. technically you jointly own 100% but HMRC tax you on the basis of 50/50.

The other basis of ownership is “Tenants in Common”. With a Declaration of Trust you can decide who owns what percentage, e.g. 60/40, 80/20. 99/10, 99/1 or whatever you like.

As a sole owner you could hold 100% of the property as a nominiee (bare trustee) for somebody else, or any other percentage for that matter, so you needn’t necessarily transfer the property into joint names when you remortgage. In fact, you don’t need to remortgage at all, but by all means do so if that results in your getting a better deal.

There’s more about ownership splits for tax purposes and Declaration of Trust available via the page linked below.

https://www.property118.com/need-become-rental-partnership/93073/



Comments

Seething Landlord

11:59 AM, 30th January 2017
About 2 years ago

Where property is already held as tenants in common, is it possible to vary the split and if so, what is the process and are there any restrictions or pitfalls?

Mark Alexander

22:07 PM, 31st January 2017
About 2 years ago

Reply to the comment left by "Seething Landlord" at "30/01/2017 - 11:59":

Yes, you would need to file Form 17 with HMRC and have a Declaration of Trust to document the split.

Note that CGT might be triggered if the owners are not married.
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