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Posted Thu, 09 Sep 2021 15:36:28 GMT by cwyu
Hi, I have some questions on my buy-to-let property. Background: 1. Property purchase price GBP 280K 2. Outstanding mortgage: GBP 200K 3. I am the sole ownership of the property and mortgage 4. My wife doesn't own any property in the UK and outside UK Questions: 1. Without changing the ownership of the property - Can I declare all the income or part of the income (e.g.90%) to my wife with valid declaration of deed of trust 2. If changing the ownership of property is required for declaring the income to my wife - According to https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#if-the-larger-share-is-given-outright-as-a-gift > The current SDLT threshold for residential properties is £250,000. This changes on 1 October 2021 > Property purchases from 1 October 2021 :The SDLT thresholds will be: £125,000 for residential properties - I have asked the bank that even I change the ownership of property, I can still be the sole holder of the mortgage -If I change the ownership to my wife before 1 Oct 2021, the outstanding mortgage is less than £250K threshold, is it correct that I don't need to pay for SDLT? - If I need to pay for SDLT, what is the rate of the SDLT as my wife is first time buyer , but it is BTL property. 3. If I transferred 50% ownership of the property to my wife, can I declare 100% of the income belongs to my wife through deed of trust? Thank you very much for your help.
Posted Fri, 10 Sep 2021 03:22:52 GMT by cwyu
According to "If the larger share is given outright as a gift "If you get property as a gift you won’t pay SDLT as long as there’s no outstanding mortgage on it. But if you take over some or all of an existing mortgage, you’ll pay SDLT if the value of the mortgage is over the SDLT threshold." In addition to my question, my wife will not take over any of the existing mortgage. Is it true that she doesn't need to pay any SDLT?
Posted Fri, 10 Sep 2021 07:57:55 GMT by HMRC Admin 9
Hi, 

The starting point is whoever has beneficial ownership of the property also has beneficial ownership of the income.

If you are the sole owner of the property and you want to transfer the right of all or part of the income to your wife, then this can be done by a valid declaration or deed of trust without transferring ownership. See the following guidance: 

Ownership and income tax

From the date the declaration/deed came into effect, HMRC would expect the income to be reported by reference to the respective beneficial interests.  SDLT is dealt with by a different department of HMRC, please follow the contact details below: 

Stamp Duty Land Tax

Thank you. 
Posted Fri, 10 Sep 2021 10:54:03 GMT by HMRC Admin 10
Hi

Thank you for your question.

SDLT is dealt with by a different part of HMRC and you would have to speak to that office but as I have said in my previous answer transferring ownership is not required to transfer the right to all or part of the income to your wife.

Thankyou.

Regards.
Posted Fri, 10 Sep 2021 12:25:41 GMT by cwyu
Thanks ! I have called SDLT department about my case. They confirmed that no transaction of property is made, then no SDLT is required. That mean in my case, I just need to declare transferring the right of all or part of the income to my wife by a valid declaration or deed of trust without transferring ownership and no need to pay for SDLT even with outstanding of mortgage.

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