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Where Taxpayers and Advisers Meet

CGT and stamp duty on property transfer

Freddie Flintstone
Posts:4
Joined:Thu Jan 21, 2021 12:32 am
CGT and stamp duty on property transfer

Postby Freddie Flintstone » Fri May 06, 2022 3:20 pm

My wife has owned a property for about 10 years that has been rented out for a number of years. There is no mortgage on the property. She is looking to transfer 50% of it to me or, alternatively, transfer the whole property to me. (It was bought with our joint funds)

I am informed that she can transfer 50% by way of deed of gift and there will be no stamp duty payable. I am not certain of the position if the whole property is transferred.

My questions are :-

1 If the 50% or 100% is transferred is stamp duty payable?

2 If 50% (or 100%) is transferred to myself what value will I have to pay stamp duty on. I am informed it may be viewed that a notional purchase price of £0 may be applied when calculating CGT meaning I would have to pay CGT on 50% (or 100% if the whole property is transferred) of the sale price. What would the CGT position be?

3 If the transfer is by way of deed of gift and the property is sold after more than 7 years what is the position as regards CGT with the property being transferred as a gift?

Many thanks for any advice in advance.

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT and stamp duty on property transfer

Postby Jholm » Fri May 06, 2022 4:12 pm

I am no SDLT expert (far from it) but my understanding is that SDLT will only be payable if money changes hands upon transfer OR the mortgage debt is transferred. So on the face of it, no issues.

Someone here should be able to confirm.

Re: eventual sale, the proceeds, costs etc will be split amongst you. You will acquire her ownership history ONLY if you were both living in the property at time of transfer. Otherwise (which seems to be the case), there could be different PPR reliefs for you both, although seemingly none for you.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: CGT and stamp duty on property transfer

Postby AGoodman » Fri May 06, 2022 4:45 pm

1. no - there's no consideration (i.e. payment)
2. no SDLT; no CGT on the transfer as between spouses; on a subsequent sale, you would potentially pay CGT on your one half share (or whole if you own the whole). Your base cost on a sale would be your wife's base cost when she acquired the property.
3. No difference. The 7 year period relates to inheritance tax and has no application here anyway as a gift between spouses is exempt.

Freddie Flintstone
Posts:4
Joined:Thu Jan 21, 2021 12:32 am

Re: CGT and stamp duty on property transfer

Postby Freddie Flintstone » Fri May 06, 2022 6:54 pm

Thanks for your responses Jholm and Agoodman. You have been a great help.


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