Transfer 1% ownership - CGT Impact

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    Transfer 1% ownership - CGT Impact

    Hi

    I am trying to remortgage a BTL property but have no income so am struggling to find lenders. I am thinking of transferring 1% ownership on title deeds to my partner as she has an income and applying for joint mortgage.

    Does anyone know if this will incurr a CGT bill. The property has gone up in value materially since I bought it.

    Any help would be very much appreciated.

    Thanks

    Tom

    #2
    Have you discussed this with a broker?
    A person with a 1% interest in a property won't have much security to lend against.

    Assuming you're not married, this would be a CGT "event" and tax might be due on the value transferred.
    If 1% is above your personal limit you'd pay some tax (unless you lived there previously and have some other allowances).
    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).

    Comment


      #3
      I will check again with my broker but he has advised this. Apparently lender doesn't care (does seems odd though!)

      If my partner has 1% of title deeds but effectively 50% of mortgage liability will this result in 50% beneficial interest in property and hence CGT resulting from 50% disposal of property?

      Comment


        #4
        If your flat was originally purchased for 100K pds and now market value is 300K pds, then 1% transfer to partner is equivalent to disposal of asset for 3K and originally costing 1K, so making your capital gain = 2K.

        This is below your annual capital gains allowance and therefore you have no cgt to pay.

        Comment

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