Transfer to Wife & CGT

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    Transfer to Wife & CGT



    Is it possible to transfer ownership of a property to my wife to avoid a large capital gains tax liability (approx £18K) if I was to sell?


    The property is currently rented out but we intend to move back in. We are currently living in the North West and need to relocate back to the South East where the property is so we will be making it our main and only property. The property is currently mortgaged with a BTL mortgage (£90K).


    My intention is to gift the property, currently valued at £250K to my wife and for her to mortgage it with a residential mortgage for circa £90K to replace the existing BTL mortgage.


    Once I have gifted the property to her it will be her only property and we will both live there. We wouldn’t rent the property again, although may sell it a few years time to down size.


    I have worked through the CGT calculator on Gov.Uk for Gifting the property to my wife and it comes back with a Nil liability. I have also worked through various scenario’s should my wife sell at a later date and again this comes back with a Nil liability.


    Does it sound right that there is no CGT liability on either transaction?


    I am aware that I would have no legal right over the property and there could be Stamp Duty Land Tax to pay, but is anything else I would need to consider?

    #2
    I am slightly unsure why your wife wouldn't have the same gain that you would have for CGT purposes. There's no CGT due now because her ownership is essentially backdated to the original purchase.

    If you lived there previously and your wife didn't (or didn't live there as long) you may actually lose some residential relief.

    You might want to consider joint ownership as an option, because then there are two lots of CGT allowance (at least currently).
    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).

    Comment


      #3
      Thanks for your reply.

      The property is solely owned by me and my wife never lived there previously, does this make a difference?

      Comment


        #4
        Originally posted by Ansell View Post
        The property is solely owned by me and my wife never lived there previously, does this make a difference?
        Only if you lived there previously, as you would have a tax relief that isn't available for your wife if you transfer ownership to her.
        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).

        Comment


          #5
          There is no capital gains tax on property transfers between husband and wife.

          As jpk suggests, you can add wife's name and become "joint owners" .

          The "consideration for stamp duty" as taken as 50% of the outstanding mortgage (£45k) , which means no sdlt.to pay..

          Comment


            #6
            And to reiterate -- when your wife sells the purchase price (and any details of allowable costs) will be backdated to your details. So no saving at all is likely.

            Comment

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