How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask taxadvisor.uk Your Own Question
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 8038
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

I understand that my fiancée needs to pay capital gain tax

This answer was rated:

I understand that my fiancée needs to pay capital gain tax on a second property which she will become joint buy to let mortgage signee with myself. In order not to pay capital gain tax, do we need to get married before completing on this deal or is there a period which we need to get married post this deal? Both of us are high rate tax payers.

Hello and welcome to JustAnswer. I am here to help you.

Please clarify for me

- you intending to purchase a property on buy to let jointly - would this be an investment property or a property to live in as main residence

- have you both got other properties

Please expand on "I understand that my fiancée needs to pay capital gain tax on a second property which she will become joint buy to let mortgage signee with myself". You don't pay CGT when you purchase a property. Do you mean to say SDLT?

Many thanks

Customer: replied 1 year ago.
We are intending to buy a family home which will become our main residence, but I already own a flat which is our main residence at present. This flat will turn to buy to let property upon the completion of remortage but my fiancee will be then added on the mortgage deed. I undestand this may make her liable for capital gains tax. She is high rate tax payer. She has no property at present. Does getting married before or after this property deal take place, have any bearing on capital gains tax which she needs to pay? I understand I can transfer assets tax if we are married.

Thank you for your reply.

You could both be liable to capital gains tax when you sell the flat at a future date as it won't be your main residence and private residence relief would be restricted to period the flat was your main residence.

If your fiancee is added to the mortgage deed of new family home then there are no CGT implications. On the otherahnd, if she is added to the mortgage deed of the flat then she could be liable to CGT on the gain over and above the valuation now.

[q] Does getting married before or after this property deal take place, have any bearing on capital gains tax which she needs to pay?

[a] if she is added to new home, there should be no CGT as it would be main residence. If added to flat, there could be CGT payable on sale whether married before or after property deal takes plaace.

My aim is to give you a professional service. I hope this is helpful and answers your question.

Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave JA today. If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Customer: replied 1 year ago.
Thanks for your detailed reply. If I understook it correctly, she does not have to pay capital gains tax on the flat when is added to the mortgage deed. We will be only liable for capital gains tax when the flat is sold.With respect to the stamp duty for the flat I worked out that she should pay £1,500 stampd duty tax.
Can you please confirm that my math is correct?
The flat is values at £400,000 with £280,000 outstanding in the mortage. She will take 50
% ownership of the flat which gives chargeable consideration of £200,000. I calculated that she needs to pay £1,500 SDLT.

Thank you for your reply.

CGT is only payable when you sell something for a gain.

Your calculation looks right. More on SDLT rates here

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

I hope this is helpful and answers your question.

taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
thank you.

I thank you for accepting my answer.

Best wishes.

Customer: replied 1 year ago.
Hello,
Thank you for the great advice.
Can we claim back extra 3% on the top of standard SDLT paid on a new home if we sell the flat within 3 years?

Thank you for your reply.

The answer is Yes.

Many thanks

Customer: replied 1 year ago.
Thank you so much because I was debating it for 2 days with my other half

Enjoy it...

Best wishes.

Customer: replied 1 year ago.
hi
Customer: replied 1 year ago.
Hello,
I have tax related question. My income from full time employment is taxed at higher.
Besides my full time job, I would like to setup a business.
Initialy, I would like to start selling things on amazon or through own website but I don't want to give up my full time day job which I like.
What is the best option from tax point of to setup business f?
Is it limited company or sale trader?
What kind of business account shall I open?In the future I would like to setup scientific consultancy. I would like to start working on it now but I am not sure how to start in terms of business and taxes.
What are income tax implication to own the business?
I am not planning to make any profits in near future but I would like to start spreadign a word.thanks.

Thank you for your question.

This is unrelated to your original question and per Just Answer protocol you have to ask a fresh question.

I will be happy to answer if you request for that in the body of your question.

Many thanks

Customer: replied 1 year ago.
Ok. Thanks