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Sam, Accountant
Category: Tax
Satisfied Customers: 14165
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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We are a married couple currently selling a flat in London

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Hi, we are a married couple currently selling a flat in London and we have each been declaring profit on the flat rental income between the two of us for the last three years. The flat is only in my husband Alex Smith's name and we wanted to know whether it should be in both our names for us to be able to each declare the tax. As we are looking to sell we would like to split the capital gains tax between the two of us and need to know if the financial benefit would be worth us doing this.
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
As the flat is only in your husbands name then only he should have declared 100% of the rental income - so you do need to rectify this for the lat 3 years - but any sale (if in this tax year) will remain your husbands capital gain liability whether you transfer the property into joint names or not as HMRC will not accept the transfer if it takes placer in the same tax year as the sale, as they will treat this as avoiding tax.
For HMRC to accept this the transfer has to be at least a tax year before the sale.
But you need to rectify the tax that might have been underpaid by declaring the income 50:50 incorrectly (it may be you are both 20% or both 40% taxpayers in which case the tax owed will be the same - but still should be put right - which will create a tax refund for you and an additional tax bill for your husband.
Let me know if you require any further assistance with this.
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