CGT in joint-names

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    CGT in joint-names

    Hi all, i have a question on CGT for a buy-to-let i am about to complete on next month having just had my BTL loan application approved. Are there any significant pros/cons for purchasing in joint names (i.e. with my sister)? We are very close and trust each other etc so no issues there. I intend to appoint an accountant to look over my affairs but would appreciate help on this basic query.



    Two people currently gives two CGT annual allowances.
    There might be issues if one of you were to die (however remote that seems).
    Maybe something to process through a trust.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      The proposed reduction in CGT will prove to be an added advantage even after taking account of the respective CGT annual allowance.


        Is the mortgage approved for joint ownership ? Regards Peter


          Originally posted by loanarranger View Post
          The proposed reduction in CGT will prove to be an added advantage even after taking account of the respective CGT annual allowance.
          Except it doesn't apply to property-related gains.


            If you are to receive different % of rental income (profit) then I believe that HMRC needs to know, apparently there is a form which needs completing. You should also consider whether the property is held "Jointly" or as "Tenants in Common". If held jointly on death their half defaults to the other, so if for instance you wish to leave your 50% share to a child, you cannot do so.

            The link below explains the tax situation a bit more clearly. I bought a property with an ex and it's become complicated on account of the things I did not consider at the time. I have only ever had one solicitor who took the trouble to explain the difference between the way the property is help, unfortunately not the one I used for this property.



              Thanks all.

              I get that we get to benefit from an extra CGT allowance (approx £11 if I'm not mistaken) if we purchase jointly. Is this a per annum allowance i.e. if disposing after 10 years of ownership do we each have a £110,000 exemption? That sounds wrong as soon as i typed it! Surely it's just £11k not 10 times £11k? If so i don't think that's worth the hassle of joint names.

              I'd have to submit a new mortgage application in joint names but adding her to the application will only help according to underwriter so no issues there.

              Loanarranger could you please elaborate on the proposed reduction etc? Sorry I am a total amateur on tax.




                The allowance is for the tax year, so if £11k currently, you pay either 18% or 28% on the remaining gain, depending if you are a lower or higher rate tax payer. Unfortunately the reduction of CGT in today's budget doesn't apply to property.


                  So to be clear, if we buy a property for 500k then dispose in the year 2026 at 800k and assuming we are both lower rate taxpayers and all else in unchanged we each pay 18% in CGT on 139k gain? If in sole name i pay 18% on 289k gain?


                    Yes, I think there are some further deductions depending on how long you have had the property, but nothing substantial, so would work on this as a top level.
                    I think the more important thing is looking at how joint ownership will impact your tax liability and making sure everything fine with HMRC if you decide to hold the property jointly but keep 100% of profit. I am not sure if you did this if it would set a president as far as capital gains are concerned e.g. If you have filed tax return for 100% of profit would they then accept a split of 50/50 on sale of the property. I own a couple of properties with my sister and believe me no matter how close you are priorities change once husbands come on the scene. If held jointly, as previously mentioned you could not pass your share to anyone else on death. I think these are bigger issues and unfortunately I am not a tax expert but have been affected by the 2 other issues I mention. We bought our first property together 20 years ago and believe me life does change.


                      Thanks shearne appreciate the advice.


                        No your gain is added to your gross income to to identify your marginal tax rate. Depending on your gross income including your rental profit you will have maybe some CGT at 18% and the rest at 28%. Regards Peter


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