Transfer of house to wife - implications?

[Keano99]

Hi,

Myself & my wife are moving house soon and want to rent out our current PPR. My wife is a stay at home mum.

Questions:
1. Can we transfer ownership of our current PPR (then rental) into my wifes sole name so that the rental income is deemed to be hers alone & therefore any tax payable will be at her marginal rate, which would be 20%???

The house is mortgaged in both our names...

2. If we can proceed with the transfer mentioned above would there be any implications as regards CGT in the future?

I know that if we both own the house and sell it in the future we will gain credit for the number of years that it was our PPR, would the house being owned by my wife only from now on have any effect on this relief?

3. If we leave things as is (in terms of ownership) and we were to sell the house in a years time the house would be deemed to be our PPR for the final year of ownership, therefore no CGT would be payable.
would the house being owned by my wife only from now on have any effect on this relief?

Thanks in advance.

 

[mf1]

I think your first hurdle will be that your lender will not agree to this property transfer.
How will your wife repay the mortgage? Why would the lender agree to this?

mf

 

[Keano99]

thanks for the reply mf1.

myself & my wife would both remain on the mortgage, so as such we would both be liable to repay it.

we would expect the rental income to cover most of the mortgage & we would top up any difference ourselves.

as long as i am party to the mortgage & therefore liable to repay it, does it matter to the bank that i am no longer joint owner of the house?

do we need to notify the bank of the transfer?

 

[mathepac]

... does it matter to the bank that i am no longer joint owner of the house?

do we need to notify the bank of the transfer?

I think your first hurdle will be that your lender will not agree to this property transfer. ...

As per mf1's original response, you must get the bank's agreement in advance of attempting the property transfer, and this will be a problem, for the reason already given.

 

[Joe_90]

Hi,
You will also need to consider the implications of S97 2G Taxes Consolidation Act 1997. The interest on the portion of the mortgage that your wife takes over from you may not be allowed as a deduction.