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Where Taxpayers and Advisers Meet

giftiing 1% to spouse - CGT and Stamp Duty

mullen77
Posts: 3
Joined: Mon Mar 12, 2018 4:25 pm

giftiing 1% to spouse - CGT and Stamp Duty

Postby mullen77 » Mon Mar 12, 2018 4:34 pm

Hi - I am looking to gift 1% of my BTL property to my wife who is a basic rate tax payer (I currently own 100% and am a higher rate tax payer) in order to secure CGT benefits when I come to sell and favourable rental tax on an annual basis. As I am currently looking to re-mortgage this is an ideal time to do this

-Property is worth 500k,
- purchase price when bought £300k,
-Outstanding mortgage is 300k. (we also have a mortgage on our residential property).

Would I be correct that Stamp Duty would be £90 (300k mortgage * 1% wife share * 3% stamp duty) have I got that incorrect?
For CGT purposes would she only have to pay tax on her 1% of the profit but would save me paying tax on 2k as that would be her taxable portion but would be covered under her CGT (e.g 500k – 300k = 200k * 1% wifes share)

Is there anything else I should consider

bd6759
Posts: 2924
Joined: Sat Feb 01, 2014 3:26 pm

Re: giftiing 1% to spouse - CGT and Stamp Duty

Postby bd6759 » Wed Mar 14, 2018 10:03 pm

SDLT payable on value of mortgage given up.

Your last sentence makes no sense. Why would your wife pay CGT on acquiring a property? CGT is paid on disposals.

You are making a disposal, but it will be deemed to have been made at a value that gives no gain/no loss, and this will be the deemed acquisition cost for your wife.

maths
Posts: 7450
Joined: Wed Aug 06, 2008 3:25 pm

Re: giftiing 1% to spouse - CGT and Stamp Duty

Postby maths » Wed Mar 14, 2018 11:36 pm

Sch 4ZA new para 9A?

bd6759
Posts: 2924
Joined: Sat Feb 01, 2014 3:26 pm

Re: giftiing 1% to spouse - CGT and Stamp Duty

Postby bd6759 » Thu Mar 15, 2018 12:00 am

Yes, Assuming it remains in the bill, there will be no SDLT.

mullen77
Posts: 3
Joined: Mon Mar 12, 2018 4:25 pm

Re: giftiing 1% to spouse - CGT and Stamp Duty

Postby mullen77 » Mon Mar 19, 2018 12:29 am

bd6759 - apologies. I was thinking ahead for when I decided to sell the property as both my wife and I could use our CGT allowance (£11,300) but if my wife only owns 1% of the property then she would only use up £2,000 (i.e 200k gain * 1%) of her £11k CGT allowance


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