The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The decision to hold a property jointly with a spouse or civil partner has consequences beyond taxation. For example, it may change the position on separation or divorce, or allow creditors of the transferee spouse / civil partner to seize the assets. The wider implications of joint ownership must therefore be considered before a decision is taken.
The first step is to establish how the property is currently held. There can be a difference between the legal and beneficial ownership of a property:
the legal owner is the person who has formal legal title to the property. This will normally be recorded by the Land Registry and / or on the property deeds
the beneficial owner has the right to benefit from the property. Beneficial ownership is sometimes known as an 'equitable interest' or 'equitable ownership'.
Where the couple share legal title to the property, each is usually the legal owner and beneficial owner of 50% of the property. However, this is not always the case, see below.
Where only one member of a married couple / civil partnership is the legal owner of a property, he or she may also be entitled to 100% of the beneficial ownership, with the other partner being entitled to nothing.
It is common for the property to be held by one individual on behalf of both members of the couple. In this case, legal ownership lies with one member of the couple, but beneficial ownership is shared between them.
It is normally beneficial ownership, not legal ownership, that matters for tax purposes. Establishing beneficial ownership can be particularly valuable where the couple are seeking to obtain CGT reliefs, or a better allocation of rental income, than would be indicated by the legal ownership of the p
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