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  • Tax

    How to plan our purchase

    Hi.

    Partner and I are buying a place to live in, we are both first time buyer, we are not married and plan to get married in 2/3 years time. Instead of putting all the money in 1 property now, we'd like to split the money to buy 2 properties, 1 to live in, 1 for BLT.

    Property A will be a cash buy at 300k, it needs a revamp and should worth around 340k after the renovation. We should have 50k cash left after the renovation, and this will be the deposit for a BTL Property B which will have either a residential mortgage with consent to let, or BTL mortgage.

    So my questions are:

    1. Can we buy a property each in our own name, then tranfer share of property to each other after we got married (so that we would both own 2 properties afterwards) ?

    2. I understand STDL will be paid on the mortgage bit. Is there any CGT due for the transfer of equities between spouses?

    3. If things going well with our job, we will move up to a bigger property C in few years time and rent out property A on a BTL mortgage. Is it worth setting up a ltd now for tax efficiency in future?

    Thanks in advance.

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    This could work very well for you.

    No CGT between spouses but there is a CGT trap if you transfer a former home partly to a spouse after you have moved out so just watch that.

    Deb

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Can you expand on this or provide a link to the details please - CGT trap on transferring part of former home to spouse.

    Thanks

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    see here https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64950

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA


    Thanks, so many things to be wary of.

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    Sdlt is payable on purchase price not the ampunt of mortgage.

    Buy one property each in only one sole name and you won't pay the additional 3%. Then convert to a buy to let later.

    You say buy one on a mortgsge but remember whoevers name it is in must have the income alone to cover that mortgage

    Good luck..


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    for a gift between spouses the SDLT is payable based on the % of mortgage debt moving.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA


    Help to buy isa is free money for ftb.

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.