In a nutshell, you transfer all or part of your property or your portfolio to your spouse. You can do this without incurring tax because gifts between spouses are exempt for Capital Gains Tax. You should be aware, however that there may still be Stamp Duty to pay when you effect the transfer.
Can I pay rental income to my wife?
It is still possible to declare rental income as belonging to your partner, so as to make use of their personal allowance and marginal tax rates.
How much money do you need to buy a buy-to-let property?
The minimum deposit for a buy-to-let mortgage is usually 25% of the property’s value (although it can vary between 20-40%). Most BTL mortgages are interest-only. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full.
What tax do you pay on buy to let?
The income you receive as rent is taxable. You need to declare any rent you receive as part of your Self Assessment tax return. The tax on your income is then charged in accordance with your income tax banding (20% for basic rate taxpayers, 40% for higher rate, and 45% for additional rate).
What should I do if my wife is buying her own property?
However, if you do own property, the other one has read the rules correctly and should apply the higher rate of SDLT – which is the standard rate plus three – to your wife’s purchase. Muddled about mortgages? Concerned about conveyancing?
Which is the best way to buy a house to let?
If you are just starting out in buy-to-let, buying a property close to home could be a good bet. As well as being familiar with the area, you’ll be on hand should anything go wrong. However, if you plan to use a letting agent to manage the property, buying somewhere further afield can present a wider range of options.
Can a wife get buy to let tax relief?
In addition, to qualify for the relief, you must be intending to live in the property as your main residence and it must not cost more than £500,000 (with the relief being limited to the first £300,000). So if your wife is purchasing a buy-to-let property, she doesn’t qualify for the relief even though she’s never owned property before.
Is it advantageous to transfer property to your wife?
To transfer ownership of property to your wife or spouse is common practice where to do so it is advantageous from a tax perspective. There are however things to consider such as does the transfer of property to your wife attract stamp duty (which if there is an existing mortgage then there could be) or is there any Capital Gains Tax to pay? .
