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  • Tax

    Joint Ownership - tax implications

    First time landlords - My wife and I are going to rent out our home later this year for a period of a number of years. We have recently paid off the small remaining mortgage. The house is currently solely owned by me, the husband. I am a higher rate tax payer, my wife's earnings are below the circa £11K tax threshold. We would like to adjust the ownership of the house to reduce the tax burden in the future. Can we do that by simply filling in the forms AP1 and TR1 that are downloadable from the land registry website? We were going to adjust the ownership to 90%-10% in my wife's favour for the duration of the rental. Will an accountant then be able to allocate rental income and outgoings based on those percentages. Any advice would be appreciated.

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    Once you have changed ownership you will need to submit a form 17 requesting to be taxed in line with that ownership (otherwise it will be 50:50) you will need to submit proof of ownership split with this.

    One thing I would say is that if you transfer to her after you have moved out of the property you will lose valuable CGT reliefs that you have built up by living in the property so it should be done prior to moving out.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Thanks for the information Debbie. Apparently in addition to filling in the Land Registry forms AP1, TR1 and an IND1 each we also need to have a Deed of Trust drafted (as well as the Form 17 you mentioned). I am hoping to do the Land Regitry forms myself, can’t be that complicated surely? A conveyancer quoted £1,000 to do the change of entitlement documentation and deed of trust and won’t do just the latter without also doing the change of entitlement.

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    If Land Registry being changed to show tenants in common in unequal shares HMRC accept this with the form 17.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA