I currently own two buy-to-let (BTL) properties in Liverpool to my name, one of which is up for remortgage. I would like to minimise this tax liability by transferring the property up for remortgage into joint names with my wife, so she can have a proportion of the income taxed in her name, therefore reducing my overall income. What is the best way to go about this? I realise there may be capital gains tax implications further down the line also. My annual income is £45,000 and this includes rental income of £15,000 and employment income of £30,000.  My main questions are: 

• Should I remortgage, adding my wife to the mortgage, and would I need to also submit some kind of Land Registry document? 

• Would the rental income of this property default to being 50 per cent tax liability each, or could it be any percentage we would like it to be? 

• The BTL property has been in my name for eight years. Do I need to inform HMRC that my personal tax liability has dropped due to now being owned jointly? 

Arthur Weller replies:  

To answer some of your questions. If you remortgage and add your wife's name to the mortgage, at the same time as adding your wife's name to the property, make sure that you don't have a stamp duty land tax liability, because HMRC will say that her taking responsibility for part of the mortgage is payment for acquiring part of the property. See HMRC’s Stamp Duty Land Tax Manual at SDLTM00330A, Example 3. If the property is put into joint names, the rental income will be received 50:50. See HMRC’s Trusts Settlements and Estates Manual at TSEM9812. You do not need to inform HMRC that the property is now jointly-owned, except that when you prepare your next tax return, you will have to tick the box for jointly-owned.