Capital Gains Tax

auntie_brenda

Am trying to advise a friend (well, have actually advised him to see an accountant as advised above, and he has agreed, but we are trying to do a 'back of fag packet' calculation).

Can anyone advise on the following 2 questions in bold (plus my mindless ramblings) :

BTL property owned by his OH (not wife). They are squaring up assets and she wants to transfer 50% to him, especially as he is lower rate tax payer. Basic sums are as follows:

Purchase price: 64k (purchase costs offset against income in 1st yr)
Current value 115k
Costs to transfer equity £350 (estimated, no mortgage)
Gross profit £50,650
Taper relief £2532.50 (5%, owned 3 full yrs)
Net profit £48,117.50

Question - is lettings relief available only if it has been your PPR? I think I am interpreting this correctly? Assuming so, the CGT is due on 48k.

Transfer 1/2 property only therefore CG only due on £24058.75.
CG Allowance = £9200
Taxable gain = £14858.75 x 40% = £5943.50.

Or, wait till next full yr up. Assuming static house prices :rolleyes: taper relief then £5065, net profit £45585. Transfer only 25% = £11396.25, less CG Allowance = taxable gain of £2196.25 (less if CG Allowance increased) x 40% = £878.50.

Question - I assume there is nothing to stop 25% transfers, with another the following year?

Thanks oh clever ones

auntie_brenda

Bump!!!!! Where are you clever ones please?????