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Buachaill
Buachaill, Barrister
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Experience:  Barrister 17 years experience
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This is about UK CGT. I am about to sell a property

Resolved Question:

Hi,
This is about UK CGT. I am about to sell a property which is currently owned equally by my sister and I. As a result of the sale both of us will make a capital gain of around £40,000. Both my sister and I are married to spouses (and living together, not planning to be divorced!) and we both want to gift a percentage of the property to our spouses so that we can take advantage of their CGT allowance (£11,100 for 2015-16) by the means known as a ‘no gain no loss transfer’. The question is, how to calculate the percentage to transfer? For the sake of argument, let us suppose that the property is being sold for £250,000 (after taking off the cost of sale i.e. estate agent and conveyancing fees). Is the percentage calculated:
a) By saying that since 50% of the property resulted in a £40,000 gain, an £11,100 gain would equate to a percentage of 50 * (11100/40000) = 13.875%. Or…
b) By saying that the value of property we each own is 50% of £250,000 which is £125,000, and £11,100 represents (11100/125000) * 100 = 8.88%
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. Here the answer is 13.875% as it is the net profit you wish to declare which determines the taxable gain of the person concerned. This is because to determine the gain, it is not the gross price reaslisable that is calculated - it is the actual profit or "gain" which is used for CGT purposes.
Buachaill, Barrister
Category: Law
Satisfied Customers: 10412
Experience: Barrister 17 years experience
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Customer: replied 1 year ago.
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