I have a few buy-to-let properties in East Anglia, some with mortgages and a few without. The properties are in my sole name, and most are freehold. I have a partner who is a foreigner and will, later on, become a UK resident. I have been with her for ten years, and I am presently living abroad as a non-UK resident. We are planning to go back to the UK and marry there soon. My only income in the UK is the rent I receive. I have now become a higher rate taxpayer because of the new rules, and my accountant has advised me that if I return, I should think carefully about trying to be more tax-efficient and by maybe giving my partner some beneficial interest in the properties by making a deed of assignment or declaration of trust or gifting a share etc. so that our taxes might be lessened since we will both manage our lettings business together and she will be getting a share of the rent or even all the rent. There will be no payment made on her part, i.e. 'no consideration'. I am open to any option that would limit any stamp duty land tax (SDLT) and capital gains tax (CGT) implications, and that would also give my partner and future wife to have 100% security over the property, should anything happen to me. Would she have the security of the full proceeds from any future sale, or is it based on her apportioned amount? I am also aware that non-UK residents rebase the value of the properties back to April 2015. Does that still hold if I do a deed of assignment if they're ever sold in the future? (properties were bought in 2002 to 2007) so, there is potentially a huge CGT liability. Could a declaration of trust be another option? I am so confused with all the options available and, of course, concerned that I will make the best decision to make my and my wife's life easier too, considering that she is a foreigner and not a British Citizen yet. For the April 2015 rebasing to apply, does it mean that we should be both outside the UK if a property is sold? If we haven’t sold the property when we come back and then transfer it into my wife's name with beneficial interests, how will the capital gains work from there onwards? Will we both be entitled to our individual CGT allowance or do we need to do another kind of transfer?  

Arthur Weller replies:  

If you have been properly non-UK tax resident for the past ten years, that means you are not 'temporarily non-UK tax resident'. Therefore, if you transfer a UK property now to your partner, while you are still non-UK resident, and before you marry her, your CGT liability will be limited to the increase in value of the property from April 2015 to the date you transfer to her. Even though it means you paying some CGT, it will have the advantage of her acquiring the property at today’s market value. So any future sale of the property to a third party will have a much reduced CGT bill. If you wait until your return to the UK and marry and then transfer, there will be no CGT to pay because any transfer to a spouse with whom one is living is 'no gain, no loss'. She will take over your base cost (i.e., what you paid for it originally when you bought it). So, if she sells it in the future, she will have lots of CGT to pay. If she does not pay you anything, there is no consideration – so, no stamp duty land tax (SDLT). However, if she takes over responsibility for the mortgage at the same time as the transfer, this is deemed consideration, and so SDLT will apply accordingly. If you want security should anything happen to you, you should write a will leaving her your properties. Or if you are concerned about becoming incapacitated, give her power of attorney. A declaration of trust transfers the beneficial ownership of the property, like a sale, but without changing the legal ownership. It is none of my business, but before you 'jump in' and transfer your properties, make sure your relationship is a good one.