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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15980
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My wife and I have sold a house which is not our lived in property,

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My wife and I have sold a house which is not our lived in property, nor was it rented and made a loss. The house is on joint names.
My wife has a property in her name only which she is selling at a profit.
Can we claim losses on the first house to ofset the gain on the second property.

Your wife can claim her share of the capital loss from the sale of the jointly owned property against the gain she will make on the disposal of the property she owns solely so long as the loss is incurred in the same tax year as the profit or in an earlier tax year. A capital loss has to be claimed within four years of the end of the tax year in which it is incurred. That doesn't mean it has to be utlilised within that period, just that the loss is registered with HMRC.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
So if the property sold is in joint names she can only claim 50pc of the loss against the sale of her own property as she is the joint owner.
So to be clear, if we jointly made a 200k loss on the joint owned property we can only claim 100k against the 200k profit on the sale of her solely owned property less the £11,100 capital allowance.
Also as she has a low income her capital gains tax on 200k would be 18pc ?

If the loss is £200,000 and your wife's share is £100,000, then that is all she can claim against the £200,000 profit on the property she owns solely. The first £11,100 of net gains made in 2015/16 will be exempt from CGT.

There are two rates of CGT, 18% and 28%. The rate or combination of rates that your wife will pay will be dependent on the level of her income in the tax year that net gains are made. If the sale occurs in 2015/16, one of the following scenarios will apply:

1 If the sum of your wife's income and the net taxable gain is £42,385 or less in 2015/16, then all the taxable gain will be charged to CGT at 18%.

2 If your wife's income alone is £42,385 or more in 2015/16, then all the taxable gain will be charged to CGT at 28%.

3 If your wife's income alone is less than £42,385 in 2015/16 but greater than £42,385 when the net taxable gain is added, then part of the net taxable gain will be charged to CGT at 18% and part at 28%.

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