Capital Gain Tax and Gifting a Share of a Property

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Capital Gain Tax and Gifting a Share of a Property

    Hi

    I'm intending to re-mortgage one of my properties and as I don't have a 'proper' income but my other half does, I was thinking of gifting him 50% of the property. The equity I have in the property is about £60K.

    Does this mean I would have to pay capital gain tax as I've effectively given away about £30k.


    Many thanks.

  • #2
    Not if you are married - gifts to your spouse are exempted. If an unmarried partner/anyone else then would have to pay CGT at market value on transfer. 3rd paragraph down on here: http://www.hmrc.gov.uk/cgt/intro/gif...it-divorce.htm
    caveat emptor
    If it sounds like I know what I am talking about........I don't.

    Comment


    • #3
      Thanks, I shall put off remortgaging until after I get married in September :-)

      Comment


      • #4
        Congratulations!

        However, just reread your post again and you should think about your income tax position before going through with it. As a married couple jointly owning you have to split the income either 50:50 or at the actual ownership share for income tax assessment. So if your partner is earning and you are not, then you could be paying more tax between you.

        Interestingly the position is not the same for jointly owning unmarried couples, they can elect any split for tax purposes they like. A point I got tripped up on a few threads down!

        You might be better achieving the same marital bliss by just changing your will to specifically benefit your new husband with the property should the worst happen.

        The time to transfer it into joint names is just before you sell - as it will halve your CGT liability.
        caveat emptor
        If it sounds like I know what I am talking about........I don't.

        Comment


        • #5
          Thank you :-)

          Really? So I could re-mortgage now and say, just gift him 20% and then would we still be able to take out a 'joint mortgage'.

          Comment


          • #6
            Originally posted by Claymore View Post
            Thank you :-)

            Really? So I could re-mortgage now and say, just gift him 20% and then would we still be able to take out a 'joint mortgage'.
            Ah I see, I take it you really need your partners income to be able to get a mortgage or get decent terms. I'm not sure on this - i.e. the relationship between the mortgage and who owns the property. I know you usually cannot get a sole mortgage of a jointly held property but not sure if you can get a joint mortgage of a solely owned property. Worth asking a broker probably.

            Depending on the increase in value you might not be getting close to the CGT-free annual allowance anyway on transfer to joint names if you did it now, but cleaner if you wait until married (if joint names required for remortgage).
            caveat emptor
            If it sounds like I know what I am talking about........I don't.

            Comment


            • #7
              Increase in value is too much. I don't need the money now so I will just wait till after September. Many thanks for the advice.

              Comment

              Latest Activity

              Collapse

              • Buying BTL and declaration of trust?
                bhodgkiss
                Hi there

                I'm buying a btl with my partner (not married)

                i believe we can do the mortgage under tenants in common (as opposed to joint tenants), then sign a declaration of trust to adjust the income split 99:1 (instead of 50:50). She's doesn't work.

                Is it that simple...
                17-08-2017, 06:22 AM
              • Reply to Buying BTL and declaration of trust?
                bhodgkiss
                Many thanks

                So aside from ownership implications if we ever split up, surely HMRC will be happiest in assessing rental income if we have a tenants in common ownership 99:1?

                Then rental split follows ownership split?

                Also if we get married it'll need to swap to...
                17-08-2017, 09:04 AM
              • Reply to Buying BTL and declaration of trust?
                jpkeates
                Which is why joint tenants is the better route.
                There's no defined split in ownership.

                How the business then arranges its affairs is then, more or less, up to the business.
                17-08-2017, 08:49 AM
              • Reply to Buying BTL and declaration of trust?
                Raju Gajurel
                As you are not married, HMRC will look for the real beneficial ownership of the property. The factors such as who put down the deposit, who receives and spends rent, etc will become important. So, if your partner owns 99% of the house, then there would not be any issue from HMRC. But, this means she...
                17-08-2017, 08:18 AM
              • Reply to Buying BTL and declaration of trust?
                jpkeates
                That's necessary for married couples.

                As unmarried partners you can purchase as joint tenants (which is probably better for you in some other ways) and decide how you split the income.
                You should probably document the income split and both sign it.
                17-08-2017, 08:14 AM
              • Split proportion of property income
                Dutchnick
                My daughter has a buy to let property with a mortgage. She is the sole named owner as the mortgage company would not accept me as a joint mortgagee on the grounds of age and income. As have provided her with the deposit and most of her student living funds she and I agree that we are 50/50 owners and...
                08-08-2017, 08:08 AM
              • Reply to Split proportion of property income
                Gordon999
                You need to have some written agreement to confirm that ( 1) you are part owner in the property and (2 ) you and daughter have agreed to share the rental income after deducting allowable expenses in the ratio agreed.

                This document is signed by both mother and daughter., and copy supplied...
                16-08-2017, 15:17 PM
              • Income Tax clams for refubishing rented property.
                bonon
                On my self assessment income tax form can I claim back monies spent in refurbishing the property back to a decent standard after tenants moved out leaving it in not a good condition. Also can I claim other expenditure on travel and accommodation in so far as the said property is 240 miles away from...
                16-08-2017, 08:47 AM
              • Reply to Income Tax clams for refubishing rented property.
                jpkeates
                To spread the costs over more than one tax year, you need to carry forward your loss in the first year.

                If that makes sense, no issue, otherwise see a local accountant (who's fees are also allowable against tax).
                16-08-2017, 08:58 AM
              • Reply to Income Tax clams for refubishing rented property.
                wfd_property
                These questions are for your accountant really.

                In general a cautious yes. Save all receipts
                16-08-2017, 08:54 AM
              Working...
              X