• Gifting Flat With Mortgage To Avoid High Income Tax On Renatl

    By Guest on 27th Sep 2020

    Hi, I have a property (mortgaged in my name) that I am forced to rent as we are moving homes. I lived in the flat with my wife and 2 children. Now, we have moved to another place and currently renting.

    Since I fall under high income tax bracket, I would like to show the rental income against my wife's name to avoid paying higher bracket tax on rental income. My wife is currently not working. However, since the house is only under my name (my name in deeds and mortgage as well in my name), I am exploring the best option to transfer the property to wife's name (either as a gift or may be using a limited company). I think gifting the property sounds ideal, but since the property has mortgage I am not sure although I am happy to be the guarantor for paying the mortgage.

    My questions are:
    1) If doing above is feasible (gifting mortgage property by being a a guarantor for the mortgage)?
    2) And what criteria lenders apply to decide such gifting and being a guarantor? Will it be a remortgage procedure for the lender?
    3) If this is possible, will I be exempted from SDLT if I purchase a new property having gifted the old one to wife?
    4) If this is not possible, what are the other options to show rental in wife's name or other means to save tax on the renal income?

    Thanks

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