Hi to All!
Would anyone mind pointing me in the direction of the relevant legislation, or give an opinion please? I've not had to deal with this particular situation before!
Mr Client owns house, then meets Miss future wife, who also owns house. They move into a new house together, and rent out their properties. OK it sounded simple enough!
I am now looking at a mortgage statement in both names, on what was Mr's house. The loan is advanced 3 months after rental has started, which presumably means it had Mr's sole ownership for the first 3 months of renting.
They haven't presented a mortgage statement for Miss's property, so I have asked whether this is mortgage free, and questioned whose name the deed is in - and what date it was converted to joint names, if applicable.
So I have two questions to look into...
a) are the rents assessible on the basis of ownership (as no election will be in place)
b) is there any CGT implication to consider on either property, if they were transferred while being used as rentals instead of PPR?
Thanks in advance :O)
Replies (5)
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I wouldn't make any assumptions, I would find out the facts. Yes split the rental income per ownership once you know this and advise if a different split would be beneficial prospectively. No CGT if they were already married when the transfers took place.
Establish the facts.
Regarding b) based on what you have told us so far & making some assumptions they could have seriously messed up & may incur much higher CGT on the final sale of Mr X's former PPR when they come to sell it.
Get the whole story now so you can advise them properly.
Once you have all the facts you might consider passing this to an accountant who can advise your clients properly.