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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 5087
Experience:  FCCA FCMA CGMA ACIS
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I am hoping that you can give me some advice to make me be

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Hi Sam,I am hoping that you can give me some advice to make me be more tax efficient.I let out my flat 2 years ago; up until that point I owned 50% of the property (it was a shared ownership property but then I got a buy to let mortgage to own the whole property).My wife is not on the lease and she is not working - I fall into the 40% tax bracketMy question is two fold - please can you give me my position with regards ***** ***** Gains Tax if I were to sell the property either now or in the future and also can the rental earnings be paid to my wife.I hope that all makes sense, I look forward to hearing from you.Kind regards,Lee

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

Did you occupy this flat as your sole or main domestic residence before you lt it out?

Customer: replied 15 days ago.
Hi there, yes it was our sole / main domestic residence.

Take the total ownership time in months. Take the letting time in months less 18, for the last 18 months of ownership you are deemed to be in residence even if this is not the case. put the adjusted letting time over the total ownership time and express as a percentage. That percentage applied to the net gain on sale will be the taxable amount. Now deduct your non cumulative Annual Exempt Amount (AEA) of 11.7K and Lettings Relief (LR) up to 40K and the residue will be taxed at 28%.

The ploy of the rental being paid to the wife may, and I only say may, be possible if it can be shown that she has 100% management control over the flat. Don't bank on it though, HMRC regard such arrangements as close to tax evasion.

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

I am sorry, but Just Answer has chopped up my reply so as to make it incomprehensible! The 'non' and the '20%' and 'management' have been cut up.

Customer: replied 15 days ago.
Thank Big Duck. So when you say ownership - do you mean the time when i owned 100% of the flat as opposed to 50%?

No, just use the full ownership time, the 50 % 100% combined. You will probably find that your Capital Gains Tax (CGT) liability will be minimal, but the later you leave the sale it will increase as the percentage exposed rises.

Customer: replied 15 days ago.
Sorry I was called away but I really appreciate your help Big Duck - thank you so much. Do you have a private practice or do you work soley via this website?

Only on this web site now, I ceased my private practice when I became an OAP and have but one customer now and I have known him these 50+ years.

Please be so kind as to rate me before you leave the Just Answer site.

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Customer: replied 15 days ago.
I've rated you and given a tip - thank you so much !

Thank you for your excellent support.

Delighted to have been of assistance.