CGT on putting hpuse in jt names

Chris_P_2

Say if I have aproperty worth £80k, bought for £50k purely in my name with a small mortgage:

If I sell there is a gain of £30K, taxed at 18% after my personal allowance. But if I put the house in joint names with my partner, would there be any cgt to pay on that transaction?

silvercar

If you give half to your partner it will count as a sale of 50%. So a disposal of 40k worth on which you have a 15k profit. You have a 10.1k allowance so would pay 18% on 4.9k. If you then sold the property, you would face a similar tax bill on your half, if the sale took place in a different tax year.

If you are married/ civil partnership you can transfer without any CGT being payable. You would both then have acquired the property at the price you paid.

I am assuming you never lived in the property as your main residence.

Chris_P_2

It would be transferred to my spouse - and no its never been a main residence.

If I transferred to her, and then we sold iyt could we use both our CGT allowances?

silvercar

Chris_P wrote: »

It would be transferred to my spouse - and no its never been a main residence.

If I transferred to her, and then we sold iyt could we use both our CGT allowances?

Yes. The transfer to her would be free from CGT of you are married and the starting point for the CGT calculation would be half the price you paid.

Chris_P_2

ok, to double check: I put it in moth names at no CGT. We sell for £80K - what would be the cgt payable?

silvercar

roughly speaking.

bought for 50k with buying costs of say 2k.

sold for 80k say selling costs 4k incl EA.

profit is 80-4-50-2=24.

That is 12k each. You have CGT allowance of 10.1k if not used elsewhere. So CGT liability is 1.9k incl in your tax return for the year of sale and pay 18% CGT tax by the end of Jan folowing the end of the tax year. ie £342 each.