Strategy for a Second property we will let for 2 yrs max

I don't know why you particularly need a trust to divert rental income to a single beneficiary: as 50% owner of the freehold you can just sign a declaration that you wish your share to go to your wife. Assuming the total rent won't take her into 40% tax band, you will then be protected against paying 40% tax on some of your rent (see new Clause 24 rules from next April, discussed ad nauseum on this website).

Buy a reference book, such as Tax Cafe's How to Save Property Tax: it will pay for itself many times over with the kind of tips and longer-term planning that you are looking for.

Have the electric system checked out before you start letting: annual inspections, like the gas certificate, may be the next burden imposed on landlords, so it may pay you to sort out any issues now: upgrade the consumer unit, check the earthing, maybe replace or add sockets and TV/internet points.

You don't mention white goods. It sounds like you'll be letting unfurnished, but your tenants will probably appreciate it if you provide a good-quality washing-machine, fridge-freezer, oven and hob. A separate tumble drier will also encourage your tenant not to dry their clothes on the radiators, which may lead to excess internal humidity, condensation mould etc.

Upgrade the locks if they are worn. Check all the windows have locks. Fit a smoke alarm and a CO detector near any boiler or gas fire (now compulsory).

Replace the curtains: prospective female tenants notice these things, and the existing ones may not fit the fire regulations anyway.

Any work done on the property after the last tenant has moved out is not deductable.

Reply to the comment left by "Tony Atkins" at "04/12/2015 - 12:14":

It is my understanding (in England) that CO detectors are mandatory only where solid fuel burners are present, not for gas.

It is my understanding that you can only vary the proportion of rent for each owner where the joint owners are not married eg If a husband and wife own equal shares of a property then the profit from the rent must be shared equally.If a property is owned say by a mother and daughter then either party can take up to 100% of the profit.A married couple can of course vary their share of ownership of the property without attracting CGT or SDLT whereas non married joint owners may be subject to CGT and/or SDLT.Speak to your accountant of course but this was my accountant's advice

Ray - I stand corrected - thank you.

It would therefore pay Neil and his wife to split the ownership of the rental property (for purposes of allocating rental profits) in a more tax-efficient proportion, at least while he is a higher-rate income taxpayer. Depending on her income, it could be as high as 99%:1%, so almost none of the profit is taxed at 40%.

This can be done by signing a Declaration of Trust and informing HMRC using Form 17 (source: http://www.taxation.co.uk/taxation/Articles/2015/05/26/333138/declaration-trust).

This re-allocation of rental proceeds does *not* need to involve notifying the Land Registry or any mortgage provider.

The ownership structure can be changed back to 50:50 when Neil ceases being a higher-rate taxpayer or before sale or occupation as a PPR, using another Declaration of Trust. This would mean that both husband and wife could then use their CGT allowances in full on sale. Obviously there will be CGT to pay, even if Neil and his wife eventually live in the house themselves, as they will be liable for the period when the house was rented. Lettings Relief and the 18-month PPR allowance will ease the CGT pain somewhat.

Reply to the comment left by "Tony Atkins" at "04/12/2015 - 12:14":

It is worth bearing in mind that white goods aren't tax deductible unless they are integrated,so perhaps only buy them if you need to to secure a tenant. Some tenants already have some white goods of their own anyway.

thanks to all ......some great points ............now how the hell do we all buy more properties without incurring this damn 2nd home Stamp duty tax from april 16 .............answers on a postcard ?

N

Reply to the comment left by "CaZ " at "06/12/2015 - 18:16":

JOINT TENANTS
* You have equal rights to enjoy the whole property
* The property automatically goes to the other owners if you die
* You can not pass on your ownership of the property in your will

TENANTS IN COMMON
* You can own different shares of the property
* The property does not automatically go to the other owners if you die
*You can pass on your share of the property in your will

You can change the type of ownership if agreed by all the owners
with out having to pay a fee

Reply to the comment left by "NVP NVP" at "06/12/2015 - 15:43":

1. incorporate.

2. Buy 15 quickly.