Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • j45p41
    • By j45p41 12th Sep 17, 2:49 PM
    • 4Posts
    • 0Thanks
    j45p41
    Transfer property to lower rate Tax payer spouse to reduce CGT on sale
    • #1
    • 12th Sep 17, 2:49 PM
    Transfer property to lower rate Tax payer spouse to reduce CGT on sale 12th Sep 17 at 2:49 PM
    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!!
Page 1
    • Wookey
    • By Wookey 12th Sep 17, 3:00 PM
    • 799 Posts
    • 401 Thanks
    Wookey
    • #2
    • 12th Sep 17, 3:00 PM
    • #2
    • 12th Sep 17, 3:00 PM
    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.
    Last edited by Wookey; 12-09-2017 at 3:03 PM.
    Norn Iron Club member No 353
    • Pennywise
    • By Pennywise 12th Sep 17, 3:20 PM
    • 9,111 Posts
    • 16,533 Thanks
    Pennywise
    • #3
    • 12th Sep 17, 3:20 PM
    • #3
    • 12th Sep 17, 3:20 PM
    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.
    Originally posted by Wookey
    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%.
    • purdyoaten2
    • By purdyoaten2 12th Sep 17, 3:56 PM
    • 662 Posts
    • 291 Thanks
    purdyoaten2
    • #4
    • 12th Sep 17, 3:56 PM
    • #4
    • 12th Sep 17, 3:56 PM
    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=5701671
    purdyoaten lost his password
    • j45p41
    • By j45p41 12th Sep 17, 6:18 PM
    • 4 Posts
    • 0 Thanks
    j45p41
    • #5
    • 12th Sep 17, 6:18 PM
    • #5
    • 12th Sep 17, 6:18 PM
    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%.
    Originally posted by Pennywise
    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?
    • xylophone
    • By xylophone 12th Sep 17, 6:41 PM
    • 22,881 Posts
    • 13,243 Thanks
    xylophone
    • #6
    • 12th Sep 17, 6:41 PM
    • #6
    • 12th Sep 17, 6:41 PM
    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.html
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,302Posts Today

8,514Users online

Martin's Twitter