Avoiding CGT on the Sale of a Second Property

dinger

I am considering selling my second property on which there will be a large CGT liability. I have the opportunity of purchasing a book from a very reputable firm of tax advisers which promises to show couples (married or not) how they can avoid this tax. The book contains lots of other things which is of no use to me and the book is not available in the library. I do not want to pay £22 for the book for this one query and be dissapointed.

I am single and have a long term partner.

I presume the marketing info for the book is alluding to transfering the property to be sold to my partner before selling.

Can anyone "shed any light" on the matter?

Thanks.

silvercar

Transferring a second property to your partner will trigger a capital gain tax calculation for you - it is only transfers between spouses that are free.

I would guess the book would suggest living in the property for a short time. This will trigger three years of relief, reducing your liability to the gain between when you bought it and 3 years before you sell.

Remember you get capital gains tax relief of about £8,000 a tax year. There is also taper relief to allow for the effects of inflation etc.

If you moved the property to joint ownership this tax year, you would have a capital gain of half the market value (less deductions mentioned above). You and your partner could then sell it in the next tax year using both your capital gains allowances.

You probably need to get professional advice or at least read up on inland revenue leaflets on the subject.

dunstonh

You probably need to get professional advice or at least read up on inland revenue leaflets on the subject.

or get married

Bermuda_John

Would this work??

Claim that you and your partner are splitting up. "Move" into the 2nd property, by transfering the bills into your name and paying the council tax.

Declare this as your PPR.

6 months later, sell it and no CGT as its your PPR.

The reason for such a quick sale.......... you reconciled your differences and moved back in with your partner.

Ian_W

Don't think so John, or only in limited circs.

Residential relief is available for the time it is your PPR and for the final 3 years of ownership, whatever it's use in that period, if a prop has been your PPR at any time when you owned it.

So if owned less than 3 years YES would work. If owned say 5 yrs you would get 36/60 residential relief doing what you suggest, but you could also get letting relief I believe and taper relief before applying your personal allowance. Could well make a significant dent in it!!

Suggest an accountant rather than a book, personally. Could well save you far more than their fees.

dinger

Thanks for all the replies.

Looks like the accountant is going to be the more cost effective route.

Cheers.

Slicker777

by the way what does PPR stand for? thanks.

dinger

Principal Private Residence

seekaywun

Interested to know the title of the book you mention? Also can you not request an interlibrary loan for example?

Ian_W

The Book's called
" A Fool and his Money ... 3000 ways to pay no tax on anything, no time"
by I.M.A. Conn-Mann, MA [Hons], DFC, DL & Bar
ISBN 666-007
Not available from Libararies, only direct from Ian W book supplies for £22 + £10 p & p.

Also available at a HUGE 50% saving on normal price I]for a strictly limited[/I introductory period only at £50 + £10 p & p is the revolutionary new book to change your life completely and allow you to retire in luxury is Ivor Evan BIGGAR - CONN's new best seller - "How to make £10million quid from property in just 10 minutes without getting off yer @rse".

Hurry whist stocks last!!

:rotfl: