Question:
I have a property that has a small buy-to-let mortgage on it. My wife doesn't earn enough to pay tax while I am on the 40% tax bracket. What do I have to do so she receives the rental income and also pays any tax?
Arthur Weller replies:
You need to transfer the property to her, so that she owns it. You can either do a formal conveyancing, or less formally by means of a deed of trust - see www.hmrc.gov.uk/manuals/tsemmanual/TSEM9520.htm. This works for income tax purposes - see www.hmrc.gov.uk/manuals/tsemmanual/TSEM9922.htm. If you transfer the responsibility for the mortgage to her, but the mortgage is less than £125,000, there is no stamp duty land tax to pay.
