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bigduckontax, Accountant
Category: Tax
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My wife has sold a second property that is in her sole name.

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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?

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 7 months ago.
We have another house which we live in. She never occupied the property only her son.
Customer: replied 7 months ago.
we did originally own the property in joint names but i transferred it to my wife when we decided to rent it out.

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 7 months ago.
we bought the property in july 2000 and sold it dec 2016. How is the reduction calculated?

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

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 7 months ago.
thanks for the info. very helpful but painful with it.regardsken

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 7 months 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.

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

Customer: replied 7 months ago.
what is a CHT declaration? i have never seen so many acronyms before i looked at tax forms!!

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

Customer: replied 7 months ago.
thanks very much. have a good weekend

Delighted to have been of assistance.