resetting the clock on CGT

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    resetting the clock on CGT

    Hi,

    I am currently the sole owner of a property that I let, which was acquired ~3 years ago via inheritance when it was valued for probate purposes.

    If I transfer the whole property to my fiancé before we get married, I presume I can 'reset the clock' to 'value as at time of transfer' (as opposed to 'value at time of inheritence') since I will have deemed to have disposed of the property (at this point in time we are not connected from a tax perspective).

    Once married I can then transfer it back (if I need to - at least a portion of it) without any cgt liability until we sell it. But when we sell it, the gain will be based on a calculation from the point at which I transferred the property to my fiancé as described above. If we are joint owners I can then get 2 persons CGT allowance.

    This is assuming no property market crash of course :-)

    Is this a legitimate thing to do, or would it be considered as tax evasion?

    #2
    In theory, Yes.

    It would not be tax evasion but tax avoidance - only the former is illegal. However, HMRC might challenge the original "gift" which could render the manoeuvre ineffective.

    I assume the value of the property has not increased significantly in the past 3 years, otherwise you could have a CGT liability?

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      #3
      Thanks King_maker

      I think if I transferred it soonish I may be able to keep it under the personal CGT allowance.

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