Deed of Assignment for Beneficial Interest in Property

• A deed of assignment transfers the beneficial interest in a property - most commonly between a husband and a wife for tax purposes.
• You can only assign a beneficial interest in property if you own the property as tenants in common or on your own. If held as Joint Tenants, you must first sever the joint tenancy. Read more - Joint Tenants versus Tenants in Common
• You can assign any amount of beneficial interest you like from 100% to 1%.
• You can change the beneficial interest at a future date for capital gains tax purposes.
• A deed of assignment is a very important document, and each party should seek legal and tax advice before signing.

What is a deed of assignment?

A deed of assignment concerning a property is used to assign an equitable interest in land to another party, most commonly a husband and wife, for sharing property income tax-efficiently. Equitable interest is also known as beneficial interest.

You would use a Deed of Assignment instead of a Deed of Trust if the relationship is husband and wife. Any dispute over ownership falls under Family Law. A Deed of Trust is better for any other relationship as it can be drafted to protect the individual interest of the parties outside of the percentage ownership of property income.

A married couple can use the deed of assignment to share the property income in a manner that suits their individual income tax position for the rental income and capital gains tax or as part of inheritance tax planning. Read more - Capital Gains Tax on Property for Married Couples

The assignment of the beneficial interest doesn't change the names of the legal owners at the Land Registry, and you can assign however much you see fit. Read more - How to transfer rental income to spouse.

Deed of Assignment Format

The deed of assignment format will depend on the transaction details and what is agreed between the Assignor, the party giving the equitable interest, and the Assignee, the party receiving it. A deed should include:

• Background. Details of the transaction between the Assignor and Assignee;
• Assignment. What is being assigned, including any consideration for the assignment;
• Costs. The parties agree on who is to cover the legal costs for drafting the deed; and
• Notice of Assignment. Written confirmation that the assignment of equitable interest has been executed.

When can't you use a deed of assignment?

You can't assign a beneficial interest until the assignor is registered at the Land Registry because until then, they have nothing to assign.

Is a deed of assignment suitable for a Form 17 declaration?

Yes, it is, as Form 17 states: "If you live together with your spouse or civil partner, we normally treat income from property held in your joint names as if it belonged to you in equal shares and tax each of you on half of the income, regardless of actual ownership. Please complete this form if you want to be taxed on your actual shares (known as `actual basis'). You'll also need to provide evidence that your beneficial interests in the property are unequal, for example, a declaration or deed."