Declaration of Trust and CGT Implications

[cjm1963]

My husband purchased a flat in his name as a BTL property. Two years later, we created a Declaration of Trust giving 100% of the income and any proceeds of sale to me. We submitted Form 17 to HMRC. We have now sold the property and I am liable to pay CGT. Can I deduct the incidental costs of buying the property, which were incurred when my husband purchased it (we were married at the time of the original purchase)? Many thanks.

[pawncob]

You "inherit" your husbands base cost and associated expenses.

[cjm1963]

Thank you, that's really helpful.

[bd6759]

Technically your acquisition cost is the value that resulted in no loss or no gain to your husband. You do not inherit his expenses, but the value that gives rise to no loss or gain will be net of expenses.

[cjm1963]

Well, both responses can't be right - could either of you possibly point me at the relevant documentation? Many thanks.

[bd6759]

One is a colloquialism, the other explains the law. Both (usually) give the same answer.

Husband buys asset for £100,000. His costs are £5,000.

He gives asset to wife.

The value that gives rise to neither a loss nor a gain is £95,000.

Wife doea not inherit the original cost nor the expens es. She simply inherits the disposal value for the husband.

The law is s58 TCGA 1992

https://www.legislation.gov.uk/ukpga/1992/12/section/58

[cjm1963]

Thank you for explaining that so clearly.