Situation as follows:
Husband owns property in sole name. Looking to transfer beneficial interest to wife (still crunching numbers but will transfer between 50-99%). No change to Legal title (will still be in husband's sole name)
Process per my understanding is as follows:
- Declaration of Trust signed to record change in beneficial interest
- No need for form 17 (since property is not jointly held from a legal title perspective to start with)
- No need to inform land registry
- Mortgage company - need to check T&Cs whether need permission
- CGT - no impact at time of transfer
- No stamp Duty - o/s mortgage is c£110k so even if 99% beneficial interet is transferred, it falls below the £125k threshold - no need to inform HMRC
- Going forward, income tax and CGT will be split according the beneficial interest.
Is the above correct?
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Replies (7)
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Re SDLT no, no, no, no, no. This is nearly as bad as Taxation Magazine readers answers on SDLT queries.
The 3% extra does not apply to transfers between spouses who are living together. But a return to HMRC on SDLT1 is needed still if the chargeable consideration is over £40,000.
Doubt the mortgage company will transfer the mortgage into wife's name if the legal ownership not transferred.
You won't be able to offset the mortgage interest in the income tax calculation
Hey,
Could you please confirm what steps have you taken you action the below:
Looking to transfer 50% or more beneficial property to wife where husband has sole legal ownership
Thanks
Meenakshi
Situation as follows:
Husband owns property in sole name. Looking to transfer beneficial interest to wife (still crunching numbers but will transfer between 50-99%). No change to Legal title (will still be in husband's sole name)
Process per my understanding is as follows:
- Declaration of Trust signed to record change in beneficial interest
- No need for form 17 (since property is not jointly held from a legal title perspective to start with)
- No need to inform land registry
- Mortgage company - need to check T&Cs whether need permission
- CGT - no impact at time of transfer
- No stamp Duty - o/s mortgage is c£110k so even if 99% beneficial interet is transferred, it falls below the £125k threshold - no need to inform HMRC
- Going forward, income tax and CGT will be split according the beneficial interest.
Is the above correct?
Is some of that correct? Yes.
Is all of it correct? No.
Could you end up with a big error due to the incorrect part(s)? Yes.