I've been trying to understand CGT, if anyone could give me some pointers this I'd really appreciate it:
Person A and B are married and each have 50% of a property (a buy to let that was never the main residence). If they divorce and A disposes of their 50% to B, then they will not be liable for CGT or Stamp Duty.
However, if they divorce and in the subsequent tax year, A disposes of their 50% to B, then A will be liable for CGT on the gain of their 50% and B will be liable for Stamp Duty on the 50% they are purchasing.
Two specific issues I am trying to understand:
1. Under these circumstances, would a subsequent sale by B, result in the 'purchase price' for the calculation of CGT becoming 'updated' to the market value when A disposed 50% to B? Obviously, if that is the case, then it could be advantageous to opt to pay CGT and Stamp Duty on 50% in order to 'reset' the purchase price to a later market value.
2. Would a subsequent sale by B, have an 'old' 50% capital gain that would be taxable in addition to the 'new' gain since becoming the full owner? If point 1 is true, then it would result in A paying a 50% gain and the other gain 'disappearing'.
I am sure that I am seriously misunderstanding something - what is it?
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