How can I dispose of a property in a cheap tax efficient way?

  • Filter
  • Time
  • Show
Clear All
new posts

    How can I dispose of a property in a cheap tax efficient way?

    I'm a reluctant landlord as I have a share in a property with a family member. I want to sell the property, but my relative doesn't. My name are on the deeds. I don't want to start a legal dispute with my relative and I want to avoid a messy confrontation. The property has a very small mortgage on it, which I'm in a position to pay off.

    The property was joint bought over a decade ago as an investment. I now live miles away, am happily married and want to buy my first family home with my wife. Due to extra stamp duty, we're looking at around a £12k surcharge on our first home.

    I'm not sure the best thing to do here, whether it's possible for me to give the house away to my mum or say my daughter (toddler at the moment). Advice appreciated.


    If you give the property away, you will still have to pay CGT on the present market value of the property.


      Set fire to it.

      No insurance payout, probably no value afterwards so no CGT to pay. Job done!

      My Dad, born 1903, was of the view that any decent citizen should pay taxes due without trying to wriggle out
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...


        Are you and your relative registered at Land Registry as joint tenants or as tenants in common ( 50% each ) ? Is your relative able to get a mortgage and buy the half share from you ?

        If you pay off the small mortgage , you could gift your 50% interest to your mother ( provided it does not push her total asset over £325K and you create a future IHT liability ) and she can received the 50% interest with no sdlt to pay.

        But there is liability to pay capital gains tax by the gifter . How much has the property price increased since it was purchased ?


          I've looked on the summary of title on the land registry and I'm listed as the only owner. The property has increased in price by around £100K since I bought it. At a push, my relative could probably get a small mortgage.

          Gifting the house to my mother would probably push her total assets above £325K (due to the family home being in a London suburb).

          Looking at HMRC's CGT calculator, I'm looking at around £14K CGT charge.

          Thanks for the advice, I'm looking for the most tax efficient thing to do here.


            If you are the only name on the deeds, in what sense do you "share the property with a family member"?
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


            Latest Activity


            • Reply to CGT under the threshold once split with husband?
              by AndrewDod
              Why exactly don't you want to declare it? If you are submitting a return anyway....
              09-04-2020, 00:06 AM
            • CGT under the threshold once split with husband?
              by stuco
              Hi hoping someone can clarify...

              I'm busy doing 2019-20 return. We sold a BTL during that year for £79500. As it was jointly owned between me and husband do I treat it as selling for £39750 for my part (and his) and therefore below the £48000 amount that you have to report on SA for...
              08-04-2020, 10:29 AM
            • Reply to CGT under the threshold once split with husband?
              by stuco
              The £48000 figure is mentioned within the SA form. There is the option to submit a CGT form if you've disposed of a chargeable asset and it says something along the lines of if the value is more than £48000 (I'm assuming it equates to 4 x this years allowance) and you've made a gain over the allowance....
              08-04-2020, 20:15 PM
            • Reply to Implications of Gifting a % of Property
              by Gordon999
              To answer your question - Capital gains tax is exempt on capital gains from disposal of main residence.

              So gifting 50% of your current home ( main residence ) to your son will be free of sdlt and cgt. You can continue to stay in the property without paying rent because you still own...
              08-04-2020, 16:11 PM
            • Implications of Gifting a % of Property
              by Claymore

              My main residence is unencumbered. I am thinking ahead (with the thought of the 7 year rule on inheritance tax).

              If I gift my son 50% of my property now - would I still be OK to live in the house?

              Would there be any immediate tax consequences of gifting him...
              18-03-2020, 15:29 PM
            • Reply to CGT under the threshold once split with husband?
              by Gordon999
              The capital gains after sale of BTL property is calculated from "sale proceeds" minus "acquisition cost" including costs charged by estate agent and conveyancing solicitor costs.

              For example : If the sale proceeds after deducting selling costs , was £78,000 and original...
              08-04-2020, 15:53 PM
            • Reply to Implications of Gifting a % of Property
              by Lawcruncher
              Things to consider:

              Think carefully before giving assets away as you do not know what the future holds.

              If you put an asset into trust or give it away as part of a tax planning exercise you are going to lose control over it.

              If you have fears about what may happen...
              07-04-2020, 15:54 PM
            • SA105 Property Expenses
              by Pejayef
              Our tenants reported a leaking roof back in January which didn't actually recur again after the initial report, they moved out in February and while we were freshening up the house for the new tenants we had the roof inspected, and decided that rather than pay out for a patch job that we would replace...
              07-04-2020, 10:47 AM
            • Reply to SA105 Property Expenses
              by jpkeates
              It's still an operating cost and still allowable.
              A very cautious person might allocate some of the cost as a capital item, but I wouldn't.

              Allowable costs are any costs incurred solely and exclusively for the business.
              Then you allocate them as either operational (allowed against...
              07-04-2020, 11:24 AM
            • Reply to SA105 Property Expenses
              by Pejayef
              Hi jpkeates, I understood that a repair could be counted, but we chose to replace the whole roof, rather than go for just a repair...
              07-04-2020, 11:15 AM