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Where Taxpayers and Advisers Meet

Transfer of Inherited Property to Spouse

Joined:Sun Sep 13, 2020 6:43 pm
Transfer of Inherited Property to Spouse

Postby mickyb21 » Sun Sep 13, 2020 7:04 pm

Hi there
Just wondering if anyone can give me some advice on the following.

My wife inherited her late fathers property about 5 years ago, the probate value on the property at the time was £220,000.

We are considering selling the property in about 6 months, the current market value is approx 330,000,

I thought it would be a good idea to transfer half of the property into my name so that we can both benefit from the 12,300 CGT tax free band when we sell it.

Just had the following question.

When completing AP1 Change to register form for the land registry do we use the current market value (£330,000) or the value when my wife "acquired" the property (£220,000). Something I read on a tax web site seemed to indicate that the probate value should be used, then we would both pay half the capital gain in six months when we sell it.

Many thanks for any help that anyone can give
Best Regards

Joined:Wed Feb 08, 2017 2:33 pm

Re: Transfer of Inherited Property to Spouse

Postby AnthonyR » Mon Sep 14, 2020 8:49 am

More a legal question than a tax one, but the guidance here:

Says "If there is no money changing hands, then enter how much the property is worth. In this case you do not need to get a professional valuation, we accept a valuation by anyone given in good faith."

So you should put £330,000. However, I've seen AP1s for gifts completed with the previous sale price/IHT valuation in the past, so if anyone can explain I'd be interested (I had a client ask me why this happens last week).

As you say, once your wife has gifted the share then you will each declare half the gain and claim the £12,300.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP

Joined:Sun Sep 13, 2020 6:43 pm

Re: Transfer of Inherited Property to Spouse

Postby mickyb21 » Mon Sep 14, 2020 9:09 am

Many thanks for your help.

I think my main concern was that if I used the current market value then I would have to pay the capital gain immediately when we do the transfer to spouse, which doesnt appear to be the case.

Best Regards
Mike Brett

Joined:Fri May 16, 2014 3:47 pm

Re: Transfer of Inherited Property to Spouse

Postby AGoodman » Mon Sep 14, 2020 1:14 pm

No, a transfer to spouse is no gain/no loss for capital gains tax anyway. The figure for the Land Registry has nothing to do with tax so you should use the current market value.

Joined:Wed Aug 06, 2008 3:25 pm

Re: Transfer of Inherited Property to Spouse

Postby maths » Mon Sep 14, 2020 4:59 pm

There is no need to transfer legal title into joint names.

All your wife needs to do is to execute a declaration of trust under which she confirms she holds the legal title for you and her, say, 50/50 ie you each have thereafter a 50% beneficial interest in the property.

This is sufficient for you to each use your own annual CGT exemptions on a sale.

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