CGT on property

[mic@f.vf.co.uk]

I'm a 40% taxpayer and thinking of selling my property which is currently being let at the moment. To minimise my CGT I want to transfer my wife name to the mortgage and remove my name. She is a 24% taxpayer.
If this is possible, when I sell the property do I have to pay 24% or 40% tax ?

[ken.voller@bdo.co.uk]

The names on the mortgage are not particularly relevant. It is who owns the property that is important, ie, whose name(s) are on the Deeds. Transfers of property between spouses are usually exempt for Capital Gains Tax so it should be possible to put the property into your wife's name. However, the property is then hers to do with what she wants, which might be to not sell it !

Please call me on Southampton 023 8035 6000 if I can help.

[steve@nunn-hayward.c]

Hi Mic,
You have to gift absolutely, benefcial ownership to your wife for this to be effective for tax purposes. Before going any further you should ensure that you fully appreciate the legal implications of this should you have matrimonial difficulties in the future.

Before deciding to undertake what may from an estate planning perspective be good planning, may I suggest you ensure the following have been considered/ruled out :-
1) What is the level of the gain? You and your wife each have £7500 annual exemption for CGT. A gain of £15000 could be covered by only tranfering 50%.
2)Have you ever lived in the property? Valuable exemptions exist if you have that may mitigate the gain.
3)Do you/ your wife have any CGT losses or hold assets standing at a loss?Could assets "pregnant with a loss" be tranfered to you to cover the CGT?
4)Has the full entitlement to Indexation and Taper relief for Non Business assets been claimed?

There are of course may other senario's and I would be pleased to discuss your position further. Please call me if you wish to move forward.

Regards

Steve Cook, ATII
Tax Partner
Nunn Hayward, Chartered Accountants
01753 888211

[mic@f.vf.co.uk]

The gains are approximately £100000.
I have owned the property for 4 years and I lived there for 2 months as my main residence. Is there any CGT excemptions for this ?

[taxman]

Hello,

Yes there should be exemptions available, provided the occupation was truly as a main residence and was not simply to avoid tax.

exemptions available could be

- principal private residence exemption for the last 3 years of ownership. however can only have 1 main residence & so may need to make a claim depending on any other residence that you own and your circumstances.

- lettings relief

- potentially 15% non business asset taper relief, depending on the date you purchased/disposal

- annual exemption £7.5K

these all depend on the particular circumstances. if you would like me to look at this i would be pleased to give you initial advice for only a nominal fee.

please e-mail me if you would like further advice

A Opt
tax accountant