Questions And Answers
Transfer of ownership on Property
asked by Jess Harbour posted 2 Years ago at 10:26
I have recently purchased a property along with my husband, which we use as our main home. Our starter home is now occupied by our daughter and her boyfriend. We plan to charge them rent to cover the mortgage on our current property. Would it be best to transfer current ownership of the property to my husband who currently has no income and therefore would not be taxed (or taxed minimal amount. Or am i barking up the wrong tree??
1-1 of 1 Answers
Andrew Diver answered 2 Years ago at 14:57, last modified: 2 Years ago at 13:57That certainly makes some sense for income tax purposes. If you look at the two properties, it is generally better to pay off the mortgage on your main home rather than the rental property as interest paid on the mortgage can be used to reduce the rental income liable to tax.
Transferring ownership to your husband exclusively will of course have income tax benefits of utilising his personal allowance, but you might wish to reverse this if a sale is contemplated as you would then be able to benefit from two annual exemptions. However, as it was previously your main residence and then let I would imagine capital gains tax will largely be mitigated by available exempt periods.
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