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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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We currently own a second property which we let. I would like

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We currently own a second property which we let. I would like to transfer the property into my spouses name for tax purposes. First question is :- Is it the land registry that i have to inform or are there other people i need to inform. Second question - if in 5 years time my wife decides to sell the property, providing we are still married, can we change it back into joint names to avoid capital gains tax? Thankyou
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

You need to use a Form TR1 to transfer a property to another person. The instructions on how to do that are here.

Technically, whilst an asset transfer between a married couple who are living together is a tax neutral event, the transfer is a disposal for CGT purposes, albeit there will be no taxable gain, and it should be reported in the tax return of the transferor. Many people don't do that, not least because they don't know they should.

There is nothing to stop you putting the property back into joint names before you sell it although ideally you would not sell it after putting in back into joint names until the following tax year. However, you won't necessarily avoid CGT. You say the property is let. Unless a property has been your main home for the entire period of ownership plus a maximum of the last 18 months of ownership when it was not your main home, there may be CGT to pay. It depends on the facts and figures as you can read in HS283 here.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

Many thanks for your response, could you explain to me the relevance of your statement 'the transfer is a disposal for CGT purposes, albeit there will be no taxable gain' - does this mean that because no money has exchanged there will be no taxable gain and therefore providing we enter the transfer on our tax forms we are not liable for any charges or does it mean we have to take a snap shot of the current value of the house as we are transferring it and if we have exceeded the CGT limit we may be liable to pay CGT now? Thankyou

Expert:  TonyTax replied 2 years ago.
Transfers or even sales of assets between married couples are tax neutral in that no CGT liability will arise as a result of such a transfer or sale to the spouse but they are disposals for CGT purposes as far as the transferor or vendor is concerned and need to be reported as such. You would need to include a value for the property but you would claim exemption for the "gain". There would be no CGT now.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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