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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13863
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have a property in my wifes name which,I bought and I am

Resolved Question:

I have a property in my wife's name which,I bought and I am proposing to put in my name and sell because I have a capital gains loss which will mean I won't pay CGT. My wife has been renting the property out. Will there be difficult with HMRC?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question

Whilst this is a perfectly legitimate thing to do - to avoid HMRC questioning the validity of the transfer, if you can try and transfer this before 05/04/2014 - and then the subsequent sale will fall into the new tax year (after 05/04/2014)

HMRC can get difficult with arguing the fact that the transfer was made purely to reduce/avoid capital gains. So that's why the breach of the two tax years is advisable, as its less likely this will be picked up for review.

If this is not possible, then just be mindful of the fact that HMRC would be well within their rights to argue this, so it might be wise to just transfer half into your name (then at least you take advantage of your wifes annual exemption allowance for capital gains sale for the year AND possibly use any unused rate band she has to allow as much of her share at 18% tax)
That way HMRC would not be so successful in their argument as there is still some charge arising.

Thanks

Sam




Customer: replied 3 years ago.

Hi Sam,


 


I have already transferred the property to my name, and probably won't sell it until 2015/6 tax year, so will declare the rental on my tax return for 2014/5 tax year, or can my wife still claim take the income (I'm in 40% tax band already) while I own the property?


 


Gerry

Expert:  Sam replied 3 years ago.
Hi Gerry

Thanks for your response

That's great - then when you come to sell HMRC cannot argue the position as you have made the transfer long before the sale, and capital gain position becomes viable.

I am afraid if the property is now in your sole name, then all the rental income (less expenses) is deemed to be solely yours, so, no, your wife cannot take the income as hers.

Thanks

Sam



Customer: replied 3 years ago.

Thanks.

Expert:  Sam replied 3 years ago.
Hi Gerry

You are very welcome.

It would be appreciated if you could rate the level of service you have received, this ensures I am credited for my time

Thanks

Sam
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