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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I own a second home from 1983. It was my principle / only residence

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I own a second home from 1983. It was my principle / only residence until 2003.The property was empty from 2003 until 2015, it has never been a rental property. Discounting the first 3 years it was empty and the final 18 months there is currently approximately 8 years that would qualify for capital gains tax. In 1983 I paid £36000 for the property , the property is currently valued around £ 230 000. What capital gains would I be required to pay? If I transfer /gift the property to my civil partner will tax be due? If the property is later sold 1 year---will my civil partner be due for a tax gain on the sale . I appreciate we can only name one property out of 2 for main residence .
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.Please clarify for me... the property remained empty from 2003 to 2015..was it used as a second home during that period?If you were to sell the property, gain would be chargeable to CGT. Any period covered as main residence and the final 18 months of ownership would be available for private residence relief. This would make it 258 months out of total period of ownership of 396 months. Based on attached calculations your maximum CGT would be £15,822. If you were to gift/transfer the property to your civil partner and the property remained a second home after transfer, then your civil partner's gain will be calculated from when you or your partner first owned it.More information on this is covered herehttps://www.gov.uk/capital-gains-tax/gifts I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Expert:  taxadvisor.uk replied 1 year ago.
Private residence relief is covered in HMRC helpsheet HS283 herehttps://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-reliefI hope this is helpful and answers your question.
Customer: replied 1 year ago.
The property was not used as a second home 2003 --to 2015. If the property is gifted to my civil partner in his name and then sold within a year how much GGT will he incur?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.If you were not residing in the property during the period 2003-2015 and you had made another property your main residence, then this period would be treated as period chargeable to CGT. This is covered in HS283.If you gift the property and it is then sold within a year, your maximum CGT would be £16,863 (CGT rate 28%).Period of ownership becomes 408 months and gain subject to CGT after gains allowance is £60,224.I hope this is helpful.
Customer: replied 1 year ago.
It would seem that gifting the property to my civil partners name will not avoid a CGT charge?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.It does not avoid CGT but defers it.If your partner does not have any other gains to worry about, you may wish to consider giving 50% and then on eventual sale you would be able to claim 2 lots of gains allowance, giving you a tax saving of maximum (11,100*28%) £3,108. I hope this is helpful.If you are happy and there are no more issues I will appreciate if you would kindly rate my service/accept the service I have provided to ensure I get credited for it by Just Answer.
Customer: replied 1 year ago.
Thank you --is £3108 the saving by putting the property in joint names?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.Yes, this is the saving by putting the property in joint names.I hope this is helpful.
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer. Best wishes.

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