Is there Stamp duty to consider if I use a Declaration of Trust?

by Readers Question

13:23 PM, 26th April 2017
About A year ago

Is there Stamp duty to consider if I use a Declaration of Trust?

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Is there Stamp duty to consider if I use a Declaration of Trust?

I have a buy to let property which is solely in my name and the mortgage outstanding amount is £125,200.

I wanted to do a declaration of trust between myself and my wife and I wanted to know if any Stamp duty is payable?

Many thanks

Kais



Comments

Neil Patterson

13:34 PM, 26th April 2017
About A year ago

Hi Kais,

It depends on what percentage you are looking to transfer to your wife and what you are trying to achieve.

There is no CGT on transfers between spouses but there is SDLT payable on the value of the mortgage liability transferred in a Declaration of Trust if the value of the transfer exceeds £40,000.

You can transfer a minimum of 1% in round percentages.

I would recommend you read our tax tutorials see >> https://www.property118.com/tax/

and consider a consultation with Mark.

Kais Malique

21:43 PM, 26th April 2017
About A year ago

My wife is a NIL taxpayer and I wanted to split the rental Income 50:50 between me and my wife.

Mark Alexander

14:39 PM, 27th April 2017
About A year ago

Reply to the comment left by "Kais Malique" at "26/04/2017 - 21:43":

Why not transfer just under £40,000, then form a partnership, then register the partnership with HMRC and obtain a UTR for it, then allocate 100% of partnership profits to your wife on the basis that she's responsible for the running of the business. You could always allocate another £40,000 chunk of the beneficial interest to her in a year or two, especially if you both want to fully utilise your annual CGT exemption allowances at the point of sale.
.


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