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

by Readers Question

9:12 AM, 8th December 2017
About 3 years 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


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Comments

Raj_aryan

12:43 PM, 7th April 2020
About 6 months ago

Reply to the comment left by Mark Alexander at 06/04/2020 - 22:48
Well, what if HMRC come back asking for SDLT.. how can landlords protect themselves if SDLT is later demanded ?

Is there a calculator to understand the risk amount ?

Mark Alexander

13:20 PM, 7th April 2020
About 6 months ago

Reply to the comment left by at 07/04/2020 - 12:43
There are plenty of Stamp Duty calculators about, but none that I am aware of that calculate this. If there were, there might be a different answer to the question originally being asked.

Raj_aryan

10:29 AM, 13th April 2020
About 6 months ago

Reply to the comment left by Mark Alexander at 06/04/2020 - 22:48I don’t know what is right about SDLT on DoT via form 17 between spouses based on the below
https://www.taxinsider.co.uk/watch-out-for-the-stamp-duty-tax-trap-when-gifting-a-property-ta
Also, I looked at some Hmrc guidance yesterday and there view is very much in line with mine.
Because a transferee normally accepts joint and several liability for any existing debt concerns had been expressed that transferees might be chargeable on the full amount of the debt even if they acquired only a part share of the property.
FA03/SCH4/PARA8(1B) ensures that in determining the amount of debt assumed each person’s liability for the debt is taken to be a proportion of the debt corresponding to the share that they own in the property subject to the debt.

The Secret Landlord

14:20 PM, 14th April 2020
About 6 months ago

You should speak to an accountant about completing a form 17

Raj_aryan

18:16 PM, 14th April 2020
About 6 months ago

Reply to the comment left by The Secret Landlord at 14/04/2020 - 14:20
My accountant asked me to contact a solicitors who then asked to contact chartered property tax adviser to confirm as form 17 is not available directly to joint tenants. It will only work for tenants in common but it will incur stamp duty if there is a mortgage involved.

Mark Alexander

2:32 AM, 15th April 2020
About 6 months ago

Reply to the comment left by at 14/04/2020 - 18:16
Talk to Mark Smith at Cotswold Barristers, he can sort this for you by severing the joint tenancy at HM Land Registry. This will have no impact on your mortgage.

He can draft the declaration of trust for you as well as calculating and completing the Stamp Duty return for you.

Total cost of the above of £400 plus VAT.

Raj_aryan

15:32 PM, 26th April 2020
About 5 months ago

Reply to the comment left by Mark Alexander at 15/04/2020 - 02:32
so are you saying it would incur stamp duty?

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