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TaxRobin
TaxRobin, Tax Consultant
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Experience:  International tax
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My ex partner left a year ago. Our property is in joint names.

Resolved Question:

My ex partner left a year ago. Our property is in joint names. What is the tax implication if he transfers his half to me?
Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello and thank you for allowing me to assist you.
When you and your spouse or civil partner are living together, any transfer of an asset between you is treated as giving rise to neither a gain nor a loss to the person transferring it.
If you are not living together or the asset involved is trading stock, any asset transferred between you is treated as transferred at its market value at the time of the transfer. So, in these circumstances, the person transferring the asset may make a chargeable gain or an allowable loss.
He would be allowed to claim personal residence relief providing he meets the requirements.
When you transfer your main residence to your spouse or civil partner, the gain is covered by Private Residence Relief. There's no Capital Gains Tax to pay as long as it has been your only or main residence throughout the time that you owned it.
Customer: replied 3 years ago.

Sorry but I'm still confused! Let's say the house is worth £600,000. He left a year ago, which I think has implications in the Private Residence Relief thing. We were not married. It has been my only place of residence since we bought it 25 years ago. I suppose I would gain as I get the property?

From what you wrote, it appears neither of us would have to pay any tax?

I am trying to assess whether it is worth my foregoing his voluntary maintenance of £600pcm and attenpting to get him to give me the rest of the house instead.

sorry - not used to this sort of thing!

Expert:  TaxRobin replied 3 years ago.
Was it his residence, would be the issue. If it has been his residence then he can exclude the gain.
You would receive a new basis (or cost) on the half he transfers to you.
On the transfer neither of you would pay CGT. Yes, you Sally would gain as you wouldl receive the property and at a higher basis or cost.
Customer: replied 3 years ago.

Sorry - i feel really stupid - " a new basis" of what?

Expert:  TaxRobin replied 3 years ago.
Your basis in the property. This is important to you should you sell and you are not allowed to use the exclusion of gain on a residence. It may help you if you move from the property and, for example, use it in letting.
Your basis is your starting point if you should need to calculate capital gains.
TaxRobin and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

I get the impression there is a lot of info I don't know about property! I've never heard of an exclusion of gain on a residence.

The HMRC website says that you don't pay CGT if the property has been you main place of residence; since September 2013 it's not been my ex's residence - he's renting elsewhere. Does this matter to him?

It seems to me that if I gain the value of half the house, and haven't actually paid for it, somewhere along the line I will be made to pay for it! You seem to be saying that this won't be the case, and he won't be out of pocket either (apart from losing his holding in the joint property)

Maybe I should revisit this in the morning??!

Expert:  TaxRobin replied 3 years ago.
Not exactly on the 2013 item you stated. The final 18 months of ownership is allowed for residence exclusion. Your main home does not have to be the one you are living in at the time.
"I gain the value of half the house, and haven't actually paid for it, somewhere along the line I will be made to pay for it!" When you sell if you cannot use personal residence then yes you will.
There would be no tax to pay by either of you on the transfer.
Customer: replied 3 years ago.

Ok. That makes sense. I envisage I would be living here when/if I sell. And neither of us pay anything at this stage if he agrees to do this

Thanks

Expert:  TaxRobin replied 3 years ago.
Thank you Sally and thank you in advance for a positive rating.
Rating lets Just Answer know you were assisted and credits me for the time.