Transfer property to lower rate Tax payer spouse to reduce CGT on sale
Options
j45p41
Posts: 16 Forumite
in Cutting tax
Hello All!
This might be a simple question (I hope).
I have a main residence and two rental properties. I would like to sell one of the rental properties. Can I transfer it to my spouse before selling so that we pay less CGT as she is a lower rate tax payer? or are there provisions within CGT that allow me to distribute the CGT into her allowance? eg. we do a 50/50 where I pay 28% and she pays 20% - Thanks!!
This might be a simple question (I hope).
I have a main residence and two rental properties. I would like to sell one of the rental properties. Can I transfer it to my spouse before selling so that we pay less CGT as she is a lower rate tax payer? or are there provisions within CGT that allow me to distribute the CGT into her allowance? eg. we do a 50/50 where I pay 28% and she pays 20% - Thanks!!
0
Comments
-
CGT is the same for everyone as individuals so there would be no benefit transferring it to her, an adjustment can be made if you have made a loss within the financial year like lost money on shares for example. https://www.gov.uk/capital-gains-tax/gifts
Income tax and it's rates/% have no bearing on CGT.Norn Iron Club member No 3530 -
CGT is the same for everyone as individuals so there would be no benefit transferring it to her, an adjustment can be made if you have made a loss within the financial year like lost money on shares for example. https://www.gov.uk/capital-gains-tax/gifts
Income tax and it's rates/% have no bearing on CGT.
Pardon?
Each person has an annual CGT exemption. There ARE different CGT rates depending on your income and what kind of asset is being sold, being between 10% and 28%. So, yes, there is potential tax savings to transfer a share of the asset to your wife for her to utilise her CGT annual exemption and pay a lower CGT rate of 10/18% rather than it all being at your higher rate of 20/28%.0 -
Yes - but it may be useful to note the comments on this thread regarding transfer of property immediately prior to sale. Or you may choose to ignore them:)(Not directed at pennywise)
http://forums.moneysavingexpert.com/showthread.php?t=57016710 -
Pardon?
Each person has an annual CGT exemption. There ARE different CGT rates depending on your income and what kind of asset is being sold, being between 10% and 28%. So, yes, there is potential tax savings to transfer a share of the asset to your wife for her to utilise her CGT annual exemption and pay a lower CGT rate of 10/18% rather than it all being at your higher rate of 20/28%.
Many thanks for the response Pennywise.
So considering there is an 11K allowance per individual per year. We should draw up a deed of trust allocating a proportion which allows myself (higher rate tax payer) to take advantage of the allowance, notify HMRC by filling in a form 17 and then file our tax returns as normal and that's it?0 -
So considering there is an 11K allowance per individual per year
£11,300 in 2017-18
https://www.gov.uk/government/publications/rates-and-allowances-capital-gains-tax/capital-gains-tax-rates-and-annual-tax-free-allowances
https://www.gov.uk/capital-gains-tax/work-out-need-to-pay
https://www.taxinsider.co.uk/681-How_to_Correctly_Gift_Property_to_Spouses.html0
This discussion has been closed.
Categories
- All Categories
- 343.5K Banking & Borrowing
- 250.2K Reduce Debt & Boost Income
- 449.9K Spending & Discounts
- 235.6K Work, Benefits & Business
- 608.6K Mortgages, Homes & Bills
- 173.2K Life & Family
- 248.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards