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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4956
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I own 75% of a house and my brother and his wife own the

Customer Question

Hi I own 75% of a house and my brother and his wife own the other 25%. myself and my wife jointly receive rent from it which goes into a joint account. We are now going to sell the house. I will be paying CGT so need to involve my wife before we sell. From what I can see she does not need to be a legal owner but a beneficial owner. My question is because she has been receiving half the rent does this make her already a beneficial owner with regards ***** ***** or do i need to do a declaration of benefical ownership before the sale. regards ***** *****
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Hi I selected low priority and low grade answer costing £20. I have been charged £40. Can you investigate this please. regards Andy
Expert:  bigduckontax replied 1 year ago.
Hello Andy, I am Keith one of the experts on Just Answer, and pleased to be able to help you with your question. The question of your fee is outside my province I regret, you will have to take it up with Just Answer Administration. Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes. Her receipt of half the rent is a private arrangement between the pair of you and inter spousal transactions are outside the scope of UK taxation. Transferring some ownership to her at this stage will make not a ha'porth's worth of difference to your CGT liability which will be based on 75% of the gain made on sale less 11.1K of non cumulative Annual Exempt Amount (AEA). If you ever lived in this house you might, in addition, be entitled to Lettings Relief (LR) up to 40K to reduce the gain further. CGT is levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. were you to transfer some of your share to your wife then that, in theory, would release another tranche of AEA, but HMRC would almost certainly regard it as tax avoidance and fight it tooth and nail. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Thank you for the answer. In which case if we do not sell now (we do not have to ) then we can use her capital gains in the future if I gift her half now. Even the HMRC website says you can do this and the internet is full of advice to do this to reduce your capital gains.
Expert:  bigduckontax replied 1 year ago.
The inter spousal transfer will be deemed to have been made at the original price the other half acquired the property. Thus the proportion of the gain will accrue to you will reduce whilst the greater to her against her tax account. You will both be entitled to AEA and LR if appropriate. HMRC will not like a transfer on Monday, sale on Tuesday scenario. They will reckon it is blatant tax avoidance! Please be so kind as to rate me before you leave the just Answer site.