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  • Mortgages & Finance

    2nd house, stamp duty,1st time buyer

    Hi All,

    Not sure where best to post this question but I purchased a house 7 years ago under my name. Since then I met my wife and we got married 2 years ago.

    1. I have since been looking for a house to purchase with option to rent or move into. I have found that house and had an offer accepted and will be making a cash payment so no mortgage needed.

    My wife does not own a house and is under the 1st time buyer category.

    I am higher tax payer as I have a salary of 49k, she earns 26k. I have read on here that if she is named as joint owner of the house with me that we can share the income from the property between us when it comes to doing the annual tax returns.

    if I purchase this property under my name I also have to pay a larger stamp duty as it is classed as a 2nd house.

    I am thinking, if I transferred the money to my wife and she brought the house under her name, this would avoid paying the larger 2nd home stamp duty? Is this correct? If we purchased under both our names then would this still be possible as this would also help with the annual tax return as we can split the rental income between us.

    Is there any other way we could do it which would benefit us that I possibly do not know?

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    I don't understand the problem.

    Just put it all under your wife's name, then you gain on stamp duty as first time buyer and there s less going into higher tax bracket on your income.

    You're married so no need to split the house ownership.

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    As I understand it, if you are married then she cannot claim to be a first time buyer because she is actually an owner of your house as well, even though she is not on the deeds. Also the new property will not be her main residence. Also you should jointly own because you don't have to split the income 50/50. You can declare to HMRC whatever proportion you want for each other. IE you 10% and her 90%. Also you will both be able to claim Capital Gains tax on any profit, when you come to sell.

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    Sldt

    better double check as if am not wrong - one spouse own a house the other spouse is no longer considered as 1st time buyer..

    tax

    if you buy the property as joint tenants the profit is taxed 50/50

    if you buy it as tenants in common then you can split the income as you wish buy drafting deed of trust / form 17 to hmrc..

    regards

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    This has just been on the News

    To get the discount both parties need to be FTB

    so If one has owned before its not applicable

    You pay stamp duty

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Well I was thinking putting it all under her name to avoid the larger stamp duty but you have a good point that we have not yet decided if we are going to renovate it and live in it (our original house will then be rented), or renovate and rent and we stay living where we are.


    With the advice above, what would happen if a couple we separated and not divorced and wants to buy their own house? Just thinking out loud...


    I dint fully understand the,

    "if you buy the property as joint tenants the profit is taxed 50/50

    if you buy it as tenants in common then you can split the income as you wish buy drafting deed of trust / form 17 to hmrc"


    When purchasing how do we state "joint tenants" or "tenants in common" is this done by the solicitor?


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    Joint ownership can take one of two forms: "joint tenant" or "tenant in common" (even though you may own freehold and not really be a "tenant" in any true sense - other than the technicality about HM being the owner of all property).

    Joint tenants each own an "undivided share" (half). If one dies, for example, the other automatically becomes owner of the deceased's share.  You cannot vary the percentage shares.

    Tenants in common each own half (or 30:70 or 99:1).  If one dies, his/her interest forms part of his/her estate and the other person does not automatically become owner (i.e. it will depend on deceased last will, or intestacy rules).

    In practice you don't really have to worry about this (your solicitor does this, but you have to tell them you want TIC/JT), though for tax purposes, TIC is more useful.

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    thanks for the information. I was not aware of this.


    How would it work if we decided to move into the new house we purchased and wanted to rent out my previous house? My wife is not on the deeds for that house as I didn't know her when I brought it.


    Would I have to go through a solicitor to have it changed to "tenant in common"

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    I am interested in this. My husband and I are tenants in common on a BTL with 50/50 share and we want to reduce his tax liability but have been told we have to take him off the deeds and transfer full ownership to me, which is a pain as we have to go through the whole remortgaging process again. Neither of the two solicitors I have discussed this with has provided any advice on the option of simply changing the percentages.  Is it really that simple or are there other legal and mortgage hurdles to go through?

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    When we moved into our current property (9 years ago) the solicitor mistakenly used Joint Tenants. I didn't notice this until a year or 2 later (and the solicitor was no longer practicing due to being 'struck off'). .

    A simple google search showed that we could do it ourselves, so I did.  https://www.gov.uk/joint-property-owners...mmon 

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