1. You would need to transfer title. Which state is the property in?
2. If you want the interest to be deductible, which you probably would, you wife would actually have to purchase part of the property from you and to borrow to do so. Just adding her to the loan will result in losing deductibility. You could have all the loan in her name with you as guarantor – but what is the point of doing this? She could only claim the interest on her share of the ownership of the property and you couldn’t claim any.
3. If a trustee purchases the property it can get a loan and you can guarantee this loan if you are a director of the trustee.

Generally it is not a problem and can result in some good rates, but there is a risk.

Most loan agreements have ‘all moneys’ clauses which mean that any security you have with the bank will be used to secure all debts you owe to that bank, whether now or in the future.

So if you get into trouble you may come down quicker than if you had your loans with different lenders.

Costs incurred before legal ownership can be deductible if you intend to keep the property to rent out. Its like borrowing to pay the deposit on an off the plan property – this interest could be deductible.

Get some tax advice on ‘withholding tax’ – otherwise you won’t be able to claim any interest if you do not withhold tax. There may be an exemption for double tax agreement countries though.

You need receipts! Tax invoices

You could claim depreciation

If one joint tenant dies the survivors share automatically increases.

Without proof of expenses they will pay more CGT. for CGT purposes JT owners are consider owners in equal shares as tenants in common.

Is it owned as Tenants in common or joint tenants?

The siblings will be up for CGT on the transfer of their shares. Changing title now will also result in stamp duty as well as CGT. To work out the CGT payable they will need access to the records so they can use expenses paid to reduce the CGT payable.

Whether they should transfer title now or just wait it out will depend – there are advantages in both.

They should seek legal advice asap.

This may be better from a tax point of view, but from a social security point of view she won’t pass the control or the source test. The deeming rules may apply to the gift too.

Also from an estate planning point of view this set up has many disadvantages.

Did you get advice before this was done – did she get advice before gifting all her money away?

A deed of partition could possibly be entered into so that each party beneficially owns just the part of the property that they take possession of. Tricky though