CGT implications on part transfer of a rented property to my wife?

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    CGT implications on part transfer of a rented property to my wife?

    Hello,

    I realise that I have made a fatal error in not transferring the property last year, but would like some advice before potentially making the situation worse!

    Issue:
    I am now a higher rate tax payer so would like the rent transferred to my wife to take advantage of her basic rate band.

    Relevant info:
    The property is in my name (mortgaged, however will be re-mortgaged in November) and has previously been my PPR (bought in 2006). In Jan 2013, we bought a 2nd property that we moved into and began renting out our original home.

    I am lucky (unlucky?) in that due to its location it receives a reasonably high rental income in comparison to its market value. I do not plan on selling the property for the time being, but equally it currently holds a low market value so wouldn’t take much to achieve a reasonable gain.

    The current gain on the property 2006 – 2014 is nil.


    I know if I had transferred the property in to joint ownership before we purchased the 2nd property, I could have kept my PPR and also claimed up to £80k (£40k x2) letting relief. But unfortunately that didn’t occur to me at the time.

    If I transfer 5% / 10% of the property ownership to her, then split the rental income 99% to her, do I still lose 100% of the PPR / Letting relief? Or only the 5% / 10% that I transfer? Also is 5% / 10% enough of a transfer to allow me to give her entitlement to the income?

    Is there anything else I should be aware of? Any advice would be very much appreciated.

    Thanks
    James

    #2
    Hi

    Any suggestions on the above? Or pointers on who best to ask?

    Thanks
    James

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