What’s the process for creating a deed of trust to transfer rental income to spouse?

by Readers Question

7 months ago

What’s the process for creating a deed of trust to transfer rental income to spouse?

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What’s the process for creating a deed of trust to transfer rental income to spouse?

As a married couple we own a house which we have been renting out for the last 18months. As I am receiving an occupational pension and state pension that put me in the 40% tax band I wish to transfer the benefit of this property to my wife. I have read that a deed of trust will allow us to do this.

I have received a quotation of £350 from solicitors to prepare this and when I asked how this is then used to ensure HMRC accept the revenue has been transferred they stated “you should be able to produce the executed deed itself to HMRC as sufficient evidence of who is entitled to the income ”

Would landlords that are members of Property118 and that have executed deeds of this sort agree with this .

The solicitors then say if I need any tax advice or have any dealings with HMRC they would need to refer me to an accountant.

Since there are no firms that I am aware of that employ accountants and solicitors how do you ensure this works successfully?

Many thanks

Chris



Comments

Mark Alexander

7 months ago

Reply to the comment left by Christopher Marsden at 10/12/2017 - 16:03
Hi Chris

Is the flat in joint names? If so you can both utilise your annual CGT allowances to reduce the tax a bit. If you ever lived in it you might be able to claim PPR relief and Lettings Relief.

In regards to the DoT we would need an email with your specific instructions.

I think you might be better off booking a tax Consultation. It will cost you an extra £400 but it comes with a guarantee of total satisfaction or your money back, so you can only win! We can then look at your CGT position in more detail too.

To book a tax consultation please see our main tax page.

If you only want to arrange the DoT on an execution only basis (ie no advice) then please email mark@property118.com

Tony Church

7 months ago

I know full well what A Declaration of Trust is and I have already done a lot of research on the matter, my purpose of setting up the trust was for the purpose of placing the equity of the property into trust to protect in against any future creditors as I know what robbing vultures there are in this country,as well as the government. this would also protect my child's interest and inheritance in the future.
My question was how do I proceed with setting up the deed of trust ?

Mark Alexander

7 months ago

Reply to the comment left by Tony Church at 10/12/2017 - 17:33
A Deed of Trust is a legal document, any solicitor can do this for you.

Setting up a Trust is something completely different, you would need specialist advice to do that.

Malcolm Ingham

7 months ago

Reply to the comment left by Christopher Marsden at 10/12/2017 - 16:03
Chris Marsden's question raises a question in my mind. We have a BTL which is unencumbered and is showing a pre-tax profit of some £125K. We are proposing to sell that property and use the money in its entirety to pay off the mortgage on our main residence. From what Chris Marsden is saying, it sounds like that would avoid CGT. Is that really the case?

Mark Alexander

7 months ago

Reply to the comment left by Malcolm Ingham at 11/12/2017 - 15:49
No, I think you have isunderstood

wanda wang

7 months ago

Reply to the comment left by Nick Price at 09/12/2017 - 11:52
A copy of the deed is all that you need to send with the Form 17. A deed mean is tenant in common. am I right? so I don't need to send Declaration of Trust to say what percentage split is ? If I am understanding correctly?
Thanks
wanda

Mark Alexander

7 months ago

Reply to the comment left by wanda wang at 11/12/2017 - 20:26
Dear Wanda

Please take professional advice from a professional who is qualified to give it. You don’t have to use the people we recommend if you don’t want but please don’t take the risk of trying to do it yourself because the consequences of getting it wrong could cost you several times what you will pay in fees to get it right.

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