Capital Gain Tax and Gifting a Share of a Property

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  • 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.

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    • #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'.

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          • #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.

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