Discussion
Nice try, but no, you need to buy outright.
Also nb buy before 1 April to beat the 3% stamp duty; I don't think there's a nil-rate band for second homes. Worst of both worlds.
Also consider buying with your other half- means when you come to sell you get two sets of cgt allowances.
R
Also nb buy before 1 April to beat the 3% stamp duty; I don't think there's a nil-rate band for second homes. Worst of both worlds.
Also consider buying with your other half- means when you come to sell you get two sets of cgt allowances.
R
I think to get the cgt allowance you need to be legal owner when you sell. That means conveyance, which means lawyers which means complex. It also means complications if it's mortgaged. Best to buy together at the start.
What I do is buy together so legally we own jointly, then sever the beneficial joint tenancy via declaration of trust so my other half owns 95% of the beneficial interest. Because she's a lower rate taxpayer, any rent is tax efficient and I only pay higher rate on my 5% instead of 50%.
You also need to declare the declaration of trust to the revenue via Form (I think) 17.
Then when you're about to sell there's nothing to stop you redeclaring the beneficial ownership split so you can create enough gain in "your" half to be able to use your full £10,000 allowance. Simples.
R
What I do is buy together so legally we own jointly, then sever the beneficial joint tenancy via declaration of trust so my other half owns 95% of the beneficial interest. Because she's a lower rate taxpayer, any rent is tax efficient and I only pay higher rate on my 5% instead of 50%.
You also need to declare the declaration of trust to the revenue via Form (I think) 17.
Then when you're about to sell there's nothing to stop you redeclaring the beneficial ownership split so you can create enough gain in "your" half to be able to use your full £10,000 allowance. Simples.
R
Nice one.. thanks
So you have btl in a sipp? I can buy outright and wondering if it's worth doing
Or just buy on a cheap mortgage and do as you say to reduce tax.
I am a higher rate and wife is zero earnings so trying to find ways of using her unused tax allowance and reducing my liability! Unfortunately am PAYE.
So you have btl in a sipp? I can buy outright and wondering if it's worth doing
Or just buy on a cheap mortgage and do as you say to reduce tax.
I am a higher rate and wife is zero earnings so trying to find ways of using her unused tax allowance and reducing my liability! Unfortunately am PAYE.
bmwmike said:
Nice one.. thanks
So you have btl in a sipp? I can buy outright and wondering if it's worth doing
Or just buy on a cheap mortgage and do as you say to reduce tax.
I am a higher rate and wife is zero earnings so trying to find ways of using her unused tax allowance and reducing my liability! Unfortunately am PAYE.
No, not in a SIPP, I don't think you can do that. So you have btl in a sipp? I can buy outright and wondering if it's worth doing
Or just buy on a cheap mortgage and do as you say to reduce tax.
I am a higher rate and wife is zero earnings so trying to find ways of using her unused tax allowance and reducing my liability! Unfortunately am PAYE.
Basically it depends on whether you trust your wife.... All our savings are in her name (eg Santander paying 3% gross interest on >£20,000), sheltering income tax on rent in her name instead of jointly as I mention above (so I don't get hit for 45%), putting £2,880 into a SIPP for her and getting another £700+ income tax relief from George Osborne on income she's not, er, earned, far less paid tax on.... Thanks v much!! All the more relevant now that they're doing a Google on BTL landlords and taxing income before mortgage interest instead of net profit. Btl landlords with no other income remain tax neutral up to the top of the basic rate of tax notwithstanding the recent changes to the system. Hence if the rent is in your other half's (no-other income) name you'll be no worse off.
That's before you get into the world of "paying" her to maintain/paint the btl, not sure if you can legitimately do that to set off against income in the property, I never risked it (bridge too far) but Eric Mc (who is an expert rather than a (slightly) gifted amateur like me) will I'm sure know.
R
bmwmike said:
Didn't know about the 2.8k into a sipp for her.. Nice one.. will look into that
Yep. Get yourself(ves) over to Hargreaves Lansdown. Like someone said on another thread, What other asset class do you know where Gorgeous George gives you a 20% head start??http://www.hl.co.uk/pensions/sipp/how-much-can-i-i...
R
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