How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TonyTax Your Own Question
TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I am selling a property with a capital gain of around £100,000.

Resolved Question:

Hi, I am selling a property with a capital gain of around £100,000. I have never lived in the property.
Would it be a good idea to transfer 50% of the property to my wife before the sale so that we can use both CGT allowances, saving 28% of £11,100.
Would it be OK if she subsequently gifts me her portion of the cash from the sale? I realise there may be Inheritance tax issues if she then died within 7 years
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. As you won't qualify for main residence relief, you wouldn't be losing out on that if you put the property into joint names before selling it to get an extra CGT exemption. However, as the rate of CGT you pay is determined by the level of your income, you need to be wary of passing a gain to someone who will pay more CGT than you. Take a look here for information on CGT: https://www.gov.uk/capital-gains-tax/work-out-your-capital-gains-tax-rate HMRC wouldn't look too kindly on an immediate transfer of funds back to you if they found out but I cannot see that they can do too much about it. They do have rules that counter aggressive tax avoidance but it would be difficult to levy those against a married couple. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks. A couple of ancillary questions.Would it be better if I just transferred (say) 10% of the property to my wife, which would be at a value of about £13500. Could she still get the full CGT relief on £11,100? How is her capitla gain calculated, given that she has only owned the property for a few weeks at most?Is there any potential inheritance tax liability on her gift back to me, or it it exempt as we are married. As we are in second marriages, our wills leave most of our separate estates to our own children rather than to each other.
Expert:  TonyTax replied 1 year ago.
You could transfer a percentage but as the title deeds don't stipulate percentage of ownership, you would need to have a deed of trust drawn up. She would still get the CGT exemption. The period of ownership is irrelevant. Gifts between married couples are exempt from IHT.
TonyTax and other Tax Specialists are ready to help you