Title Split Mortgage Implications

by Geoff H

11:35 AM, 1st August 2017
About A year ago

Title Split Mortgage Implications

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Title Split Mortgage Implications

My wife and I are looking at the implications of a title split on a property we own.

We have obtained the necessary permissions and nearly completed the work to separate an extended 5 bed house that we jointly own into two separate dwellings (houses not flats). We wish to mortgage these separately and we are in contact with our regular advisor and a recommended solicitor.

We have been advised that when split at Land Registry the two new titles cannot be under the same joint ownership as the existing title and it has been suggested that we put one property in each of my wife and I’s names. That’s fine but it has a couple of implications for our circumstances which are that I have a btl mortgage qualifying income from a pension but my wife has no regular sufficient income. This means that:-

  1. I can get a good mortgage deal on my property but my wife cannot on hers.
  2. If we were to try and change the split of income from the properties we probably can’t give my wife income from my property as form 17 guidance talks about income from property that is jointly owned.
  3. Is there an alternative to putting the properties into our two individual names? Or another way to maximise the mortgage potential of the pair of properties?

Any helpful feedback would be gratefully appreciated!

Geoff



Comments

Mark Alexander

11:44 AM, 1st August 2017
About A year ago

Hi Geoff

You could transfer a small percentage of the beneficial interest in your properties to your wife (avoiding SDLT on transactions over £40,000 in value) and then form a partnership with her. There is no CGT on transfers between spouses. You could even backdate such an arrangement to the date of your last tax return date which I suspect was for the 2015/2016 tax year.

The partnership could then allocate profits disproportionately to ownership if necessary.

Given that you could file returns for the 2016/2017 tax year on this basis you would then have the proof of income you require too.

As an added bonus you may well find such an arrangement to be far more tax-efficient.

For further details please see the related articles to the right of this one.

Puzzler

11:43 AM, 3rd August 2017
About A year ago

Reply to the comment left by Mark Alexander at 01/08/2017 - 11:44Mark, I don't know if it's the new layout but related articles do not appear on the right any more so how would we access them?

Mark Alexander

12:07 PM, 3rd August 2017
About A year ago

Reply to the comment left by Puzzler at 03/08/2017 - 11:43Related articles are a new addition to the website. They are not on all articles yet but they are on most of the new ones.

If you are on a desktop or a large laptop you will see them to the right if there are any. On mobile devices and tablets they are below comments.

We are considering adding a button between the bottom of the main article and before comments to "Preview Related Articles" if there are any to see. We are awaiting costings to develop the code for this prior to making a final decision.

Puzzler

12:16 PM, 3rd August 2017
About A year ago

Reply to the comment left by Mark Alexander at 03/08/2017 - 12:07I don't see it on this article, and your first post refers to it. I am on a large laptop and have scrolled across but there is nothing there

Mark Alexander

12:19 PM, 3rd August 2017
About A year ago

Reply to the comment left by Puzzler at 03/08/2017" rel="nofollow">https://www.property118.com/title-split-mortgage-implications/#comment-93224">03/08/2017 - 12:16I can see two "Related Articles" immediately below the main article picture and to the right. What can you see there please?

Also, what browser are you using?

If you could take a screen shot and email it to mark@property118.com that would be very much appreciated


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