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Facts: I am married, we are both 40% tax bracket earners

Customer Question

facts:
I am married, we are both 40% tax bracket earners
myself and my wife have a joint mortgage on our prime homeI own a second house that is mortgaged in my name with just me on the deeds
the second home is not buy to let, but used by my daughter rent free
the second home was bought 1 year ago and I plan like to sell it, with a likely profit of £45k and an outstanding mortgage of £160k
Due to the profit on the second house I will be liable for CGTquestion:
Can I add my wife to the deeds before sale or at the point of sale of second house to share the CGT allowance on the profit?
If yes, can I do this without having to add my wife to the mortgage?
If yes to both questions, how would I go about this as my bank hold the deeds?
If the answer to above is no, then is there another way to share the CTG liability with my wife?
Submitted: 11 months ago.
Category: Tax
Expert:  bigduckontax replied 11 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Adding your wife - yes you can, but better leave a decent interval, say a few months. Even HMRC recommend this tax avoidance. Doing so will divide your profit in half, 22.5K less your non cumulative Annual Exempt Amounts (AEA) of 11.1K, each exposed to CGT at 28%, tax bill say 3.2K each.

If your bank is holding the deeds as the lender than you will have to get their approval to the transaction to which they may not agree. In any event a lender might charge a hefty fee for the privilege.

I do hope that you have found my reply of assistance and hope I have not rained too hard on your parade.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3612
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 11 months ago.
Thanks
Expert:  bigduckontax replied 11 months ago.

Delighted to have been of assistance.

Thank you for your excellent support.

Customer: replied 11 months ago.
BTW, can hsbc force me to change the mortgage to add my wife to deeds?
Expert:  bigduckontax replied 11 months ago.

No why should they? Your problem will be getting the bank to change the existing mortgage terms at all.

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