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Sole owner higher tax slab

Started by pkapdi, May 05, 2019, 09:41:54 AM

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pkapdi

Hi,
I am a sole owner of a property (House) in England and on a higher tax band. I stayed in the property for 21 months and had to move out to different city (in Scotland) for job purposes. The house is currently on mortgage for another 23years but have received consent to let last week. My wife currently doesnt pay any tax as she is House maker.
I will advertise my property for lease from  next week. Is there a way I could move my rental income which will be taxed 40% to her income to save on the tax purposes.
England has a tax slab of 20% upto £46000 while Scotland has upto £43000. Property being in England, will I get any benefit of £3000?
Also is there anything which I should consider at this point to avoid paying more in future like CGT etc etc.
Appreciate your help in advance.

Simon Pambin

In order to move the income you'd have to transfer ownership of the asset i.e. the house. However, that isn't quite as drastic as it sounds as you'd just be transferring beneficial ownership, which can be done via a Declaration of Trust. Any half-decent solicitor should be able to draw one up for a couple of hundred quid. There's no capital gains tax on transfers of assets between spouses but you will have to watch you don't get caught by stamp duty: if you made the gift in such a way that your wife takes responsibility for the mortgage, you'd be liable for stamp duty on the balance of the mortgage at the time of the transfer, so it might be better to frame it more cannily than that. Again, this sort of thing should be bread and butter for a good solicitor.