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CGT - Transfer to Spouse allowed and TR
a&akay
Posts: 526 Forumite
in Cutting tax
I have worked out that the capital gain on my half share of a property given to me by my Mum in 1988 is about £70k (subject to sale). From the HMRC site taper relief would be 9 years plus the bonus year ie 40% (if sold before 6 Apr 08 subject to confirmation by the Treasury). I have never lived in it etc. I am a40% taxpayer and my wife has never worked. Questions please.
1. Can I only transfer a max of 50% of my share to my wife or can I stipulate a higher percentage, eg 85%, to use up both our annual CGT allowances and her lower tax allowance?
2. I assume her taper relief would be the 40% as well. Is this correct?
1. Can I only transfer a max of 50% of my share to my wife or can I stipulate a higher percentage, eg 85%, to use up both our annual CGT allowances and her lower tax allowance?
2. I assume her taper relief would be the 40% as well. Is this correct?
0
Comments
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1. You can give any percentage you like to your wife so you can calculate the figure which will minimise the tax liability.
2. Yes, for taper relief she would acquire your history and so would be entitled to the same percentage relief as your are.
One thing to be careful about - you need to transfer the share to your wife before the property is sold. It must be clear that you have gifted the share in the property and not the share in the proceeds. I understand that not all solicitors appreciate this and they do not always make the paperwork clear.If it’s not important to you, don’t consume it0 -
Exactly when in 1988?
If your mum gifted your half share to you before 31/3/88 and it was her home you might be entitled to Dependent Relative Relief. Take a look here http://www.hmrc.gov.uk/helpsheets/ir283.pdf
The Dependant Relative Relief is on page 40 -
Thanks to both. I am in the process of registry with Land at Nottingham and will use their forms, not a solicitor, see their email below. It was gifted in Oct unfortunately.
Dear xxx
Thank you for your enquiry.
As long as the property is registered, the form to use to transfer the
legal ownership is TR1. When you send that in to us for registration it needs
to be accompanied by application form AP1 and a fee based on how much the transfer is for (see scale 1 of our fees on the fees order on the website, or scale 2 if there is no money involved).
You will also need to consider whether or not the Transfer will attract Stamp duty. If the transfer is for monetary consideration of more than £1000, you will need to complete form SDLT 1. If no money is changing hands, or the consideration is for less than £1000, you will need to complete form SDLT60. Both of these forms may be downloaded from the following site
www.inlandrevenue.gov.uk via stamp duty.
TR1 and AP1 can both be printed from the website.
If you have a mortgage you may well need the consent of the lender to any
transfer of ownership.0 -
Does this mean that a Deed of Gift has to be made, and then the transfer registered with the Land Registry ?0
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In my case the last entry in the Land Registry schedule is a Deed of Gift to myself and my brother. My Brother also says Indexation Relief applies up to 1998 which also takes a huge bite out of the Taxman's take. In fact we are within our own allowances now.0
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Are you really sure? Yes Indexation Relief should make a big difference to your original calculations but have you got a sound valuation for 1988. I have seen cases where the District Valuer has knocked off more than 60% off acquisition values to reflect the parent’s right of continuing occupation.In my case the last entry in the Land Registry schedule is a Deed of Gift to myself and my brother. My Brother also says Indexation Relief applies up to 1998 which also takes a huge bite out of the Taxman's take. In fact we are within our own allowances now.
Just be careful. You and your brother are prime candidates for Enquiries. Its much better to get it right first time.0
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