{"id":40,"date":"2008-08-13T09:32:16","date_gmt":"2008-08-13T09:32:16","guid":{"rendered":"http:\/\/www.propertyportfoliosoftware.co.uk\/blog\/2008\/08\/13\/income_tax_tip\/"},"modified":"2008-08-13T09:32:16","modified_gmt":"2008-08-13T09:32:16","slug":"income_tax_tip","status":"publish","type":"post","link":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/income_tax_tip.html","title":{"rendered":"Property Tax Tip for Landlords"},"content":{"rendered":"

Moving Properties into Joint Ownership to Avoid Income Tax
\n<\/strong>
\nBecause you can save tax<\/a> by holding your property in a partnership, you may well be thinking about how to transfer to joint ownership.<\/p>\n

It is actually very easy to do and you will incur no capital gains tax liability if you are transferring part ownership to your spouse, i.e., your husband or wife.<\/p>\n

PLEASE NOTE<\/strong>: if part ownership of the property is to be transferred to anyone other than your spouse, there may be a capital gains tax liability<\/a> triggered.
\nThree Simple Steps to Follow<\/strong>
\nThe following three steps will show you how you can transfer the property into joint ownership.<\/p>\n

STEP 1<\/strong>. Contact your mortgage lender.<\/p>\n

Tell your mortgage lender that you want to transfer the property into joint ownership<\/strong>, and explain why you want to do this.<\/p>\n

Your mortgage lender will then send you a new mortgage application form for you to complete in order to move the property into joint ownership.<\/p>\n

Unfortunately, lenders will treat transferring an existing property into joint ownership as though you are applying for a new mortgage<\/strong>. Therefore, it is very likely that you will have to submit the same paperwork<\/strong> again<\/strong> and effectively apply for a new mortgage.<\/p>\n

It is likely that the property will be put into joint names on the same terms as the original contract<\/strong>; that is, if the original mortgage was fixed at 4.99% and had four years left to run on the fixed period, the new mortgage will be the same.<\/p>\n

However, if mortgage rates have reduced<\/strong>, then be cheeky and ask if you can also have it at the new reduced interest rate<\/strong>!
\nSTEP 2<\/strong>. Contact a solicitor.<\/p>\n

Once your mortgage application has been approved, your solicitor can have all relevant documents changed into joint names pretty quickly. It usually takes about four weeks<\/strong> to complete all the legal paperwork.<\/p>\n

Also, tell your solicitor whether you want the property to be owned as \u2018Joint Tenants<\/em>\u2019 or as \u2018Tenants in Common<\/em>\u2019, and how you want to split the ownership of the property. For example, you may want to hold the property in the majority of the lower rate tax payer<\/em>, so that you pay less tax<\/a>.<\/strong><\/p>\n

Whenever a property is being purchased by more than one person or transferred into multiple ownership, your solicitor should always ask you how you wish to hold the property.
\nSTEP 3<\/strong>. Notify HMRC<\/p>\n

If you decide to have an unequal ownership split, tell HMRC<\/a> of this split as soon as possible.<\/p>\n

Don\u2019t delay in notifying HMRC as it could well cost you in tax penalties<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Moving Properties into Joint Ownership to Avoid Income Tax Because you can save tax by holding your property in a partnership, you may well be thinking about how to transfer to joint ownership. It is actually very easy to do … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-40","post","type-post","status-publish","format-standard","hentry","category-property_tax"],"_links":{"self":[{"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/posts\/40","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=40"}],"version-history":[{"count":0,"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/posts\/40\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=40"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=40"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.propertyportfoliosoftware.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=40"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}