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Where Taxpayers and Advisers Meet

Transfer 50% of property to my wife to reduce CGT

ug76gxf
Posts: 3
Joined: Tue Apr 23, 2019 9:52 pm

Transfer 50% of property to my wife to reduce CGT

Postby ug76gxf » Tue Apr 23, 2019 10:02 pm

Hello,

I have read a few posts from people in similar positions but does answer my questions fully

Situation. I have a second property which has been rented since I purchased it. Its owed 100% by myself with no mortgage and I wish to sell it now. was brought 5 years ago for £125k and will sell for around the £200k mark which leaves about £70k in profit. I am a higher rate taxpayer and worked out after costs I will own about £16k in CGT

If I were to transfer 50% to my wife I am of the opinion I pay no stamp duty or capital gains

If I transfer 50% to my wife (basic rate taxpayer) and sell the home after a few weeks will I be able to use her CG allowance of £12k fully? I also understand her 50% profit will be taxed at 18%

What I am trying to understand if I transfer a few weeks before putting on the market do I get her benefits (low rate taxpayer and CG allowance fully or is this calculated from the point at which she became 50% owner in which is case its pointless as we want to sell asap)

Regards

ug76gxf
Posts: 3
Joined: Tue Apr 23, 2019 9:52 pm

Re: Transfer 50% of property to my wife to reduce CGT

Postby ug76gxf » Tue Apr 23, 2019 10:20 pm

Also forgot to add. The property is empty and will not be rented so there is no income to worry about just the sale proceeds

someone
Posts: 381
Joined: Mon Feb 13, 2017 10:09 am

Re: Transfer 50% of property to my wife to reduce CGT

Postby someone » Wed Apr 24, 2019 8:10 am

The CGT is calculated based on ownership proportions at time of sale (assuming you are legally married)

My quick back of envelope calc suggests you'd pay less tax if you gave 80% to your wife before sale (assuming no PPR for yourself, HR for you, BR for your wife)

ug76gxf
Posts: 3
Joined: Tue Apr 23, 2019 9:52 pm

Re: Transfer 50% of property to my wife to reduce CGT

Postby ug76gxf » Wed Apr 24, 2019 7:04 pm

thanks for the reply

Can you outline the legal process which needs to be followed in order to split the property in this way? Would like to go to a solicitor with some idea as to what I want doing assuming its not a straightforward form filing exercise which I can attempt

thanks


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