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bigduckontax, Accountant
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The property I bought in 1995 comprises a farm house, a 3 bedroom

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The property I bought in 1995 comprises a farm house, a 3 bedroom cottage and an annex. Each of these three properties are subject to council tax. The annex was built over 10 years ago and I understand that a condition of the planning approval is that it cannot be sold as a separate residence. The whole property seems to be registered with the land register. My parents aged 86 and 90 occupy the cottage essentially rent free.
Taken together the property would probably value at more than £2 million and become subject to the mansion tax if ever introduced. Without the cottage, it would probably not value at more than £3 million. I am thinking of selling the cottage to my wife. She is the sole owner of a property in London, but I am the sole owner of the above property. I presume that this transaction would be subject to stamp duty. I would appreciate legal advice on this matter as well as thoughts on what other options might be open to me.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hi I'm Keith and happy to help with your question.
Here is the Gov UK advice on the matter:
'Property given as a gift
If the property is received as a gift there’s no SDLT to pay, so long as there’s no outstanding mortgage on it. But if the person who receives the gift takes over some or all of an existing mortgage, then SDLT may be payable if the value of the mortgage is over the SDLT threshold.'
But you propose to sell it to your spouse so [same source]:
'SDLT may become payable when all or part of an interest in land or property is transferred from one person to another if anything of monetary value is given in exchange.
Anything of monetary value that’s given in exchange for the property is referred to as the ‘consideration’. This can be cash or another type of payment. It can also include the value of any outstanding mortgage that the buyer takes over. SDLT may be charged on the consideration.'
You should avoid Capital Gains Tax (CGT) as this is an inter spousal transaction. Eventually, of course, CGT will apply unless there is Private Residence Relief (PRR) available, but be careful as spouses have only PRR between them.
There you are, a few general ideas to give you some ideat of the possibilities.
Customer: replied 2 years ago.

There was another question in that The whole property seems to be registered with the land register. My parents aged 86 and 90 occupy the cottage essentially rent free. So can I create a separate interest and gift the property to my wife. The cottage is subject to a separate council tax levy.

Expert:  bigduckontax replied 2 years ago.
It would be normal for the property to be registered with the Land Registry. However, it appears from the tenor of your question that this is all one entry in the Register. If this is the case you will have to split the hereditaments and will require the services of a solicitor and their conveyancing clerks for this relatively simple exercise.
Once split they you may gift to your spouse free of SDLT, but make sure no consideration passes. Such an inter spousal transfer would be outside the scope of CGT and Inheritance Tax also.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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