Capital Gains Allowance

Coeus

Hi All!

I have a query regarding the treatment of taxable persons when it comes to selling a home. Basically I am aware each individual is entitled to £9,080 of tax-free capital gains per tax year. My question is that, if one was to sell a property, could they sign over £9,080 to multiple persons (e.g. Family) so that on sale of the home in the same tax year each person could exercise their right to the individual capital gains allowance? The net effect being less tax paid at a horrendous 18% rate!

One would have thought not but couldn't hurt to ask. Any input would be greatly appreciated,

Coeus.

fengirl_2

You can transfer as many parcels of a property to as many people as you want, but you still only get one annual exemption.

Coeus

Thanks Fengirl but you have missed the point. If one can transfer as may shares of the value of a property to a set of individuals at £9,080 each, and on sale they exercise individually there capital gains allowance, the original owner of the home could avoid paying any capital gains tax. Then have the individuals then return the cash proceeds of the sale with no tax liability. Is this legal is the question?

fengirl_2

Only if you dispose of only one share of 9080 in a year.
If you dispose of the whole property (even in small parcels), you only have one allowance to set against the whole gain. So if you have a property worth £90800 and sell it to 10 people, you would still have a gain based on proceeds of £90800. It does not matter what the recipients do with their share - their exemption has no bearing on the liability of the origional owner.

Coeus

Is it possible to provide 'gifts' of a share of the home to family members with no tax consequences, so essentially one wouldn't have made any capital gains on sale? The end result being on actual sale of the home each family member who received a 'gift' would legally own a share of the home. The idea being that the original owner's shareholding, and thus tax liability, is reduced.

CLAPTON

If you give a gift of part of an asset then the HMRC treats this as a disposal for CGT purposes... i.e. they charge you CGT on the capital gain. You have a CGT allowance of 10,100 but you can only use that once a year.

the exception here is you can give you wife/husband a gift without any CGT arising

Pumpkinface_2

Coeus wrote: »

Thanks Fengirl but you have missed the point. If one can transfer as may shares of the value of a property to a set of individuals at £9,080 each, and on sale they exercise individually there capital gains allowance, the original owner of the home could avoid paying any capital gains tax. Then have the individuals then return the cash proceeds of the sale with no tax liability. Is this legal is the question?

No you cannot do this. The only thing that could be done would be to put the house in joint names with a spouse and then there would be two CGT allowances.