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: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I purchased a property in July 2014 for £275 000.00 for

Resolved Question:

Hi
I purchased a property in July 2014 for £275 000.00 for my parents to live in. It was purchased in my sole name and there is no lender involved and no rent was charged. Due to changing health circumstances, I am selling the property. A buyer was found quicker than expected for the agreed price of £350 000.00. This leaves me with a capital gain of £75 000.00.
To reduce my capital gains tax bill, can I gift half the property to my wife before I complete the sale?
Would a Declaration of Trust need to be drawn up?
Would this need to be registered at the Land Registry?
Would this be classed as a linked transaction for Stamp Duty?
And is there anything else I need to consider?
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. You can gift half the property to your wife. You would need to put the property into joint names before you exchange contracts to sell the property as that date is the effective date of sale for CGT purposes. As it can take some time for a name to be put on the title deeds, a deed of trust to record the joint ownership would be a good idea so long as it is witnessed and dated. The deed of trust won't be registered with Land Registry as you can read here but given that the two parties are you and your wife I see no need for a restriction be registered with Land Registry. The gift to your wife would not be a linked transaction for SDLT purposes. Look here for information on linked transactions. In your case, there is no cash or mortgage involved. If there was, an SDLT charge might have occurred. You need to make sure that whilst the two of you will get a CGT exemption to use against your respective shares of the gain, that you won't pay more CGT overall. The rate or combination of CGT rates that you will each pay will be dependent on your respective incomes in the tax year you dispose of the property. I hope this helps but let me know if you have any further questions.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Hi
You say we have to put the property in joint names before the exchange of contracts. So by completing a deed of trust to record the joint ownership, would this be classed as the property being in joint names and be sufficient for a solicitor to complete the exchange of contracts?
Thanks
Expert:  TonyTax replied 1 year ago.
Yes, it would.