How to Gift UK Property to Partner

Wylief3500

[FONT=&quot]I would appreciate advice on the process and tax implications of transferring my property in the UK to my partner.[/FONT][FONT=&quot][/FONT]
[FONT=&quot]We are both classed as Non UK Resident and have been for the past 20 years.[/FONT][FONT=&quot][/FONT]
[FONT=&quot]The property was purchased in 1997 and is valued at GBP 285,000, has no mortgage and is being rented; The property is considered as PPR and I am paying Income Tax on the rental.[/FONT][FONT=&quot][/FONT]
[FONT=&quot]Reading through the threads, it looks like the simplest way is to make a ‘gift’ of the property but I don’t understand the tax implications. Will there be any capital gains tax and a need to pay Stamp Duty?[/FONT][FONT=&quot][/FONT]
[FONT=&quot]As we do not live in the UK is it possible to complete this process on-line with the Land Registry Office? I assume there will be a fee.[/FONT][FONT=&quot][/FONT]
[FONT=&quot]Or, would it be easier to add her name to the deed although I would rather she owned it 100%. [/FONT]
[FONT=&quot]Thank you for your advice.[/FONT]

pjclar02

Hello there

As you are non-UK resident, and have been for a considerable amount of time, you will not be liable to UK capital gains tax on the disposal of the property to your partner.

If this is to be an outright gift, there will be no stamp duty land tax as there is nil consideration.

I would recommend you appoint a conveyancer to complete the paperwork for you to update the title to the property to your partner's name and prepare the necessary filings. I would hope this would only cost you around £150-£200, but you would have to confirm this.

You will need to consider the tax implications in your country of residence in terms of the capital gain. You will also need to consider the following:

1) Your partner will need to register for UK self-assessment to report the income profits;
2) If you receive the rental income gross, you may nee to look into getting a revised form NRL1 in the name of your partner.

Hope this helps

antrobus

See - Frequently Asked Questions (FAQs) - Capital Gains - http://www.hmrc.gov.uk/cnr/faqs_capgains.htm

Q1. I am not resident in the UK, am I liable to capital gains tax? A.
(i) If you are not resident in the UK but are ordinarily resident here, you are liable to capital gains tax for each year that you are ordinarily resident here.


Q2. I carry on a trade through a branch or agency in the UK, but I am not resident/not ordinarily resident, am I liable to capital gains tax when I dispose of assets held for the purpose of this trade?
A. Yes, you are liable to capital gains tax on these disposals.


From which I'd conclude that 'ordinary residence' is what counts for CGT purposes and that it would be worthwhile asking whether or not renting out a property constitues a trade for the purposes of CGT legislation.

pjclar02

antrobus wrote: »

From which I'd conclude that 'ordinary residence' is what counts for CGT purposes and that it would be worthwhile asking whether or not renting out a property constitues a trade for the purposes of CGT legislation.

For CGT purposes, you need to look at residence and ordinary residence, based on the facts provided, the OP is neither. It is very unlikely that the OP could be ordinarily resident without being resident, normally this only occurs when going overseas for a short period.

It is very unlikely that the rental of the property will amount to a trade - the acquisition of a property to let out is an investment, and therefore the sale of the property will be liable to CGT.

Wylief3500

pjclar02 wrote: »

For CGT purposes, you need to look at residence and ordinary residence, based on the facts provided, the OP is neither. It is very unlikely that the OP could be ordinarily resident without being resident, normally this only occurs when going overseas for a short period.

It is very unlikely that the rental of the property will amount to a trade - the acquisition of a property to let out is an investment, and therefore the sale of the property will be liable to CGT.

-Thank you for your helpful advice to my post. I will certainly look into the appointment of a conveyancer to transfer the deeds to my partner.