CGT On Splitting A Property

[TM100]

Hi

I'm thinking of splitting my main residence into 2 separate properties but before I do, I would welcome any advice on what CGT I would become liable for.

The property is currently valued at approximately £800k and once split would create 2 properties valued at £550k & £400k. Once the properties have been split I will be looking to sell both and purchase somewhere else.

I would appreciate any advice on how this would be assessed for capital gains.

Thanks

[maths]

Assuming you have always lived in the property then on a disposal no CGT arises.

You appear to want to develop the property by converting into two flats then selling both.

Effectively, your home will be appropriated to a business (ie you developing the property) at its current market value (no CGT). On sale of flats any "profit" will be subject to income tax, not CGT as you will effectively be trading.

[TM100]

Thanks Maths for the reply

Can I just check then if disposal of the properties would be treated as profit and therefore subject to income tax that the profit would be split between my wife and I as the property is held in joint names.

I am already a higher rate taxpayer, but my wife is a basic rate taxpayer so could I sell each property in different tax years to reduce the amount of tax she would have to pay

Thanks