CGT query

[vik238754]

Hello. Since 2013 my wife and I own a property as tenants in common where the beneficial interest split is 90% her and 10% me. We are now looking to sell the property. I have a large CGT loss and using the HMRC CGT calculator I have calculated that if I change the split to 70% me and 30% my wife I can fully offset the loss against the gains I make on the property - cgt is payable as I let the property.

My question is is it ok to do this - what will HMRC make of this. As soon as I have submitted form 17 to hmrc I am planning to put the house on sale and hopefully getting it sold within a few months. I have calculated the saving in cgt is 19k.

No SDLT is payable on the transfer between my wife and I as the outstanding mortgage is below the SDLT threshold

[jpkeates]

What you are planning to do is routine and HMRC will accept the change as a matter of routine admin.

[Gordon999]

Hmrc rules allow transfers between spouses without cgt. The recipient spouse takes on the asset at the original purchase price.

[vik238754]

Reading the below gov page im not sure if i need to complete the sdlt form? My wife is gifting 60% of the property to me but there is a outstanding mortgage of around 70k. Does it mean i am taking on 60% of the mortgage as well? The mortgage has always been in my name.

https://www.gov.uk/guidance/stamp-du...0or%20services

[vik238754]

Apologies my last post wasnt very clear and I am unable to edit it so I will clarify my query.

When changing beneficial interest does it mean a percentage of the mortgage is also transferred? I have a 70k mortgage which has always been in my name. In 2013 I transferred the property from myself to me(10%) and my wife (90%) and I signed a declaration of solvency which was required by the mortgage lender. Now as per my first comment I am looking to change the interest to 70% me and 30% my wife


The reason I am asking is because I have read the below gov page and it looks like a sdlt form has to be completed when there is debt involved
https://www.gov.uk/guidance/stamp-du...0or%20services

[jpkeates]

Any change to the proportions owned should probably be declared to (or agreed by) the lender - it's usually one of the terms of a mortgage.
It may not be an issue in your case, though.

I don't see why SDLT will arise, though.
You're not changing the title - the change in percentage isn't something you'll be registering at the land registry is it?

[Gordon999]

If your wife assigns 60% interest to you by "deed of assignment " or "deed of trust", there is no change of the registration at Land Registry . So there is not sdlt to pay.

[Section20z]

Apologies my last post wasnt very clear and I am unable to edit it so I will clarify my query.

When changing beneficial interest does it mean a percentage of the mortgage is also transferred? I have a 70k mortgage which has always been in my name. In 2013 I transferred the property from myself to me(10%) and my wife (90%) and I signed a declaration of solvency which was required by the mortgage lender. Now as per my first comment I am looking to change the interest to 70% me and 30% my wife


The reason I am asking is because I have read the below gov page and it looks like a sdlt form has to be completed when there is debt involved
https://www.gov.uk/guidance/stamp-du...0or%20services

Yes, if mortgage is over £40k you'll need to file the SDLT form

[jpkeates]

Yes, if mortgage is over £40k you'll need to file the SDLT form

Why, there's no change in title?

[vik238754]

Any change to the proportions owned should probably be declared to (or agreed by) the lender - it's usually one of the terms of a mortgage.
It may not be an issue in your case, though.

I don't see why SDLT will arise, though.
You're not changing the title - the change in percentage isn't something you'll be registering at the land registry is it?

I don't think I will be registering the percentage change at the land registry. It's something I will confirm with the solicitor who is creating the declaration of trust document.

When I did the transfer in 2013 from me to me and my wife the mortgage liability remained solely with me. We signed a a2e legal mortgage. So I am guessing as the mortgage remains with me there is no issue with transfer of debt in relation to sdlt? I am trying to make sense of the following gov page but it doesnt make a great deal of sense: https://www.gov.uk/hmrc-internal-man...ual/sdltm04040

[Section20z]

Why, there's no change in title?

My bad I misread post as a transfer

[vik238754]

Hi. My solicitor has told me the declaration needs to be registered with the land registry otherwise there will be no effect of creating the declaration. Is this correct?

I have also spoken to my lenders and they have mentioned they will want a new copy of the title. I mentioned to them I am not looking to register at the Land registry and they said ask the solicitor to send through what i am aiming to achieve and the lenders back office will make a decision of whether they want it registered with the Land registry.

I wasnt expecting things to be this difficult. i may abandon doing this

[Gordon999]

The Declaration changing the beneficial interest to 70:30 is prepared only for showing to the Tax Office .

The existing registration of 10% :90% legal interest at Land Registry does not change and the Mortgage Lender has already accepted this situation. .

[vik238754]

The existing declaration states 10:90 beneficial interest not legal interest

[Gordon999]

I believe your solicitor has to prepare a Deed of Trust which transfers 60 % interest in the property from wife to you.

You need to make clear to your solicitor that Deed is for HMRC only and not for registration at Land Registry

After signing the Deed , you send a Form 17 to HMRC to notify the change to 70: 30 beneficial interest