BTL in cash in my wifes name

[lordturpin]

This may be a silly question....but is there any tax/legal issues that i should be aware if I buy a BTL property in cash and place it 100% in my wife name (who has no current earnings).

Of course then all rental income etc is applied against her taxcode i assume ?

Many Thanks

[anonymous-user]

I've looked at this. Then I decided I didn't want to risk losing the whole lot should things turn sour!

Just be very aware that the short term tax benefit could cost you the whole property later.

[Gixer968CS]

Landcrab_Six said:

I've looked at this. Then I decided I didn't want to risk losing the whole lot should things turn sour!

Just be very aware that the short term tax benefit could cost you the whole property later.

If you're married it won't matter who's name the assets are in should you divorce as they are all assets of the marriage and therefore jointly owned and everything together gets thrown in the mix. I don't think there is a risk in that perspective.

[lordturpin]

Thanks - I am not expecting a divorce at any time in the future....or not that i am aware of !

[tight fart]

When you say cash I presume you mean without a mortgage.

Or do you mean buy it in cash and wait for her to get carted away for money laundering?

[Eric Mc]

Who's cash are you using to buy the property?

[Candellara]

lordturpin said:

This may be a silly question....but is there any tax/legal issues that i should be aware if I buy a BTL property in cash and place it 100% in my wife name (who has no current earnings).

Of course then all rental income etc is applied against her taxcode i assume ?

Many Thanks

That doesn't wash with HMRC i'm afraid. As you're married they apply half against each of you tax wise. I was in this situation and 50% is based upon my Wife being a standard rate tax payer any 50% is my liability as a higher rate tax payer.

Set up a Company and run the BTL through that.

[lordturpin]

The cash would come from a joint savings account.

[leef44]

Candellara said:

lordturpin said:

This may be a silly question....but is there any tax/legal issues that i should be aware if I buy a BTL property in cash and place it 100% in my wife name (who has no current earnings).

Of course then all rental income etc is applied against her taxcode i assume ?

Many Thanks

That doesn't wash with HMRC i'm afraid. As you're married they apply half against each of you tax wise. I was in this situation and 50% is based upon my Wife being a standard rate tax payer any 50% is my liability as a higher rate tax payer.

Set up a Company and run the BTL through that.

Was that because the cash came from a joint bank account or does that not matter?

Did HMRC look at the source of the funds (i.e. you) and argued that it is a joint property despite the ownership title so apportioned income 50:50?

[lordturpin]

My initial enquiries around this seem to simply point to who owns the deeds, so if property is 100% in my wifes name then she gets the revenue and pays the tax regardless whether the purchase funds came from a joint account or inheritance or another

If its jointly owned in any way then then if reflects the split, normally joint ownership is 50/50 but could be anything.

[996c2]

My understanding is that I can give as much of my money to my wife as I want without any inheritance tax implications.

She can then use this money to buy a BTL property and earn rent under her own tax code.

You'll need a solicitor to do the conveyancing so I am sure they can advice you on this point.

[Countdown]

lordturpin said:

This may be a silly question....but is there any tax/legal issues that i should be aware if I buy a BTL property in cash and place it 100% in my wife name (who has no current earnings).

Of course then all rental income etc is applied against her taxcode i assume ?

Many Thanks

None whatsoever. I've done it.

It will mean an extra tax Return to fill in every year if profits > £2,500.

Edited by Countdown on Monday 26th October 17:41

[Countdown]

lordturpin said:

My initial enquiries around this seem to simply point to who owns the deeds, so if property is 100% in my wifes name then she gets the revenue and pays the tax regardless whether the purchase funds came from a joint account or inheritance or another

If its jointly owned in any way then then if reflects the split, normally joint ownership is 50/50 but could be anything.

Even then you can make a beneficial declaration so the entire income is treated as your wife's for tax purposes.

https://www.gov.uk/government/publications/income-...

[lordturpin]

Countdown said:

None whatsoever. I've done it.

It will mean an extra tax Return to fill in every year if profits > £2,500.

Edited by Countdown on Monday 26th October 17:41

Profits ? There is no mortgage and not in a Ltd

Edited by lordturpin on Monday 26th October 20:05

[Countdown]

lordturpin said:

Countdown said:

None whatsoever. I've done it.

It will mean an extra tax Return to fill in every year if profits > £2,500.

Edited by Countdown on Monday 26th October 17:41

Profits ? There is no mortgage and not in a Ltd

Edited by lordturpin on Monday 26th October 20:05

If its a BTL will it not be rented out? And if it is there will be income (rent) and expenditure (repairs and maintenance, gas safety certs, electric safety certs, bailiffs and locksmiths fees for eviction , possibly CGT) so hopefully she’ll make a profit, and if this exceeds £2,500 she’ll need to submit an SA100.....

[lordturpin]

Yes. Hope to hit that threshold, thank you

[anonymous-user]

lordturpin said:

This may be a silly question....but is there any tax/legal issues that i should be aware if I buy a BTL property in cash and place it 100% in my wife name (who has no current earnings).

You can't "place it in her name". You'll make her a gift of the purchase price and then she buys the house. No problems whatsoever, the property will be hers, the income will be hers and it will be taxed as hers.

However, it's mind-bogglingly inefficient. BTL is taxed inside out and back to front, has high transaction costs, has tenant risk and is very illiquid. (i.e. sale is "all or nothing".)

Does SWMBO have ISAs? If not, why not?
Does SWMBO have pension? If not, why not?
Does SWMBO have other investments? If not, why not?

The everyman BTL party is well and truly over.

[Soir]

I was told by my accountant that although BTL house purchase is in joint names, you can put the tenancy agreement in my wife’s name and she will be taxed on the income. Not both of us.

[Pit Pony]

Candellara said:

That doesn't wash with HMRC i'm afraid. As you're married they apply half against each of you tax wise. I was in this situation and 50% is based upon my Wife being a standard rate tax payer any 50% is my liability as a higher rate tax payer.

Set up a Company and run the BTL through that.

That's wrong. Whoever told you that wasn't a qualified accountant.
My wife owns 95% of our buy to lets. We purchased as tenants in common and then later declared the split to the hmrc. Form 17 by the way. She gets 95% of the profit and pays a little tax on it.
We are both jointly liable for 100% of the loan interest, but apportion that 95%/5% as advised by said same accountant.

[Pit Pony]

lordturpin said:

My initial enquiries around this seem to simply point to who owns the deeds, so if property is 100% in my wifes name then she gets the revenue and pays the tax regardless whether the purchase funds came from a joint account or inheritance or another

If its jointly owned in any way then then if reflects the split, normally joint ownership is 50/50 but could be anything.

Google Tenants in common verses joint tenants.