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 bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4416
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

My wife has sold a second property that is in her sole name.

Customer Question

My wife has sold a second property that is in her sole name.We are now assessing what capital gains are due.Can we split the profit made equally between us; claim our own allowances and pay CGT due as if the property was in both our ownerships or is it solely my wife who is responsible for the CGT?The property was rented out for the last three years of ownership but our sons lived there rent free prior to this for 15 years or it was empty. Does this affect the CGT calculations?
Submitted: 20 days ago.
Category: Tax
Expert:  bigduckontax replied 20 days ago.

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

Unfortunately you cannot split the gain between the pair of you. Husbands and wives are separate persons as far as UK taxation is concerned so the Capital Gains Tax (CGT) falls entirely on her shoulders.

The renting out of the property does affect the CGT. Did she ever occupy it as he sole or main domestic residence? Also in what accommodation do you and your wife reside?

Customer: replied 20 days ago.
We have another house which we live in. She never occupied the property only her son.
Customer: replied 20 days ago.
we did originally own the property in joint names but i transferred it to my wife when we decided to rent it out.
Expert:  bigduckontax replied 20 days ago.

She is liable to CGT for the whole gain made on the property. For the last 18 months of ownership she is deemed to be in occupation even if this is not the case, so there will be a slight reduction to the quantum of the gain depending on the total ownership time. CGT is levied at 18% or 28% or a combination of the two rates depending on her income including the gain in the tax year of disposal. She has a non cumulative Annual Exempt Amount (AEA) of 11.3K to offset the gain.

I do hope that you have found my reply of assistance.

Customer: replied 20 days ago.
we bought the property in july 2000 and sold it dec 2016. How is the reduction calculated?
Expert:  bigduckontax replied 20 days ago.

18 / 197 = say 91% of the gain will be subject to CGT.

bigduckontax and 2 other Tax Specialists are ready to help you
Customer: replied 20 days ago.
thanks for the info. very helpful but painful with it.regardsken
Expert:  bigduckontax replied 20 days ago.

Thank you for your support.

CGT is a nasty little tax which can creep up on you unawares. One customer bought a flat for his son to live in at Uni, but kept in in his own name. His son lived there for years after graduating and when it was ultimately sold it cost Dad 38K in CGT.

Customer: replied 18 days ago.
big duck, hope its not too late to ask this but i cannot find anywhere where on the self assessment form where i can claim the 18 months period you have stated as being allowed.
Expert:  bigduckontax replied 18 days ago.

You won't, it isn't there! You should tak it into account in your CHT declaration by reducing the gain.

Customer: replied 18 days ago.
what is a CHT declaration? i have never seen so many acronyms before i looked at tax forms!!
Expert:  bigduckontax replied 18 days ago.

I meant CGT declaration, sorry, the SA108 form..

Customer: replied 18 days ago.
thanks very much. have a good weekend
Expert:  bigduckontax replied 18 days ago.

Delighted to have been of assistance.