I owned a rental property before we got married. I'm a higher rate tax payer and the tax situation has got to the point where it no longer pays for itself. The property is effectively going to be my pension so I'm reluctant to sell it.
The obvious way out is to transfer ownership to DH who is a basic rate tax payer.
However, I'm mildly concerned that if we ever split he's legally allowed to walk off with 50pc of the property. (I assume he gets that automatically but in the event of a divorce he might be more merciful if it's in my name and always has been. If he owns it on paper he might take a different view.)
Apparently the way to make the property income his is by transferring "Beneficial Interest" to him. Would I ever be able to take it back without his consent?
As I understand it by transferring "Beneficial Interest", ownership remains with me? What does that mean if he has a right to the income and the proceeds of a sale? Why bother, why not simply transfer full ownership?
Any other thoughts on how I ease my tax burden here?
(We have no plans to split up., I'm just cautious.)