Capital gain tax!! I need help!!!

greatkic

My wife has a property which was bought in 2010 Dec.
We bought the property with my wife's name because I had a property already at that time.
We let it out for 2years and moved back in Jan 2012.
Once we moved in Jan 2012, we have been contacted by local agents for selling the property with a good price.
We expected we can esaily archive 80K for Capital gains.
am I reliable on tax of 80K of Capital gains or can I claim any deductions from the gains?

CLAPTON

what's happened to your own house?

greatkic

I let it out in Jan 2012.

RabbitMad

Your wife will get principle primary residence relief, so the whole gain will be exempt from cgt.

getmore4less

The dates don't add up Dec 2010 to Jan 2012 is just over 1 year not 2 years

xylophone

You and your wife were living in your house. Presumably this was your and her PPR.

Eighteen months ago, your wife bought another house. She let out the house.

You have now moved into your wife's house - this is now the principal private residence for you and your wife.

Now you want to sell the house in which you both lived previously? Or the one into which you have just moved?

greatkic

I want to sell the house which we have just moved.

MobileSaver

greatkic wrote: »

We let it out for 2years and moved back in Jan 2012.

getmore4less wrote: »

The dates don't add up Dec 2010 to Jan 2012 is just over 1 year not 2 years

The dates are very important... if it's been let for two years then you are too late to nominate your wife's home as your Principal Private Residence as the facts will show that your other home was your main home - and so you will have to pay CGT.

If however it has been owned for under two years then you still have time to nominate it as your PPR and so there will be no CGT to pay.

getmore4less

MobileSaver wrote: »

The dates are very important... if it's been let for two years then you are too late to nominate your wife's home as your Principal Private Residence as the facts will show that your other home was your main home - and so you will have to pay CGT.

If however it has been owned for under two years then you still have time to nominate it as your PPR and so there will be no CGT to pay.

You also get the last three years of ownership which are starting to overlap with actualy living there,

The dates don't make sense but it looks like there is no CTG, if bought after MAY 2009.......... obviouly this dtes moves until sold.

00ec25

Whether you are too late for the 2 year nomination is irrelevant.

Your wife now lives in the property which is still in her sole name.
The fact you are married means that it is now, under CGT law, also your main home, as married couples can only have one main home between them. So, unless you have already nominated another property (unlikely as you have not mentioned that) the situation is as follows:

a) You are now automatically entitled to claim 36 month period prior to selling it as PRR (aka: “the 3 year rule”). For example, if you sell it in May 2012, it would be CGT exempt back to June 2009, ie 36 months ago

b) Because it is (your and) your wife’s main home, she is entitled to claim letting relief against the period when she did not live there. This is worth up to a £40,000 reduction from the total gain

c) Your wife, as sole owner, also gets her personal allowance of 10,600 reduction against the gain

So she bought it in Dec 2010 – she has until November 2013 to sell it and it will be exempt from CGT because of the 3 year rule. If she sells it after Nov 2013 then she also gets to claim £40k letting relief and 10.6 personal allowancne against the gain.

It will be a long time before she is liable for CGT

BTW – do NOT transfer ownership into your name if you intend to sell it very soon as HMRC have the power to ignore transfers between husband and wife where they consider this was done purely to avoid CGT liability.

BTW 2- your own home is now liable for CGT as from Jan 12

Kynthia

00ec25 wrote: »

a) You are now automatically entitled to claim 36 month period prior to selling it as PRR (aka: “the 3 year rule”). For example, if you sell it in May 2012, it would be CGT exempt back to June 2009, ie 36 months ago

b) Because it is (your and) your wife’s main home, she is entitled to claim letting relief against the period when she did not live there. This is worth up to a £40,000 reduction from the total gain

Are both of these applicable when you didn't live in the property first? I though these were benfits to those who move out and let their home as opposed to buying an investment property that you move into just before selling it?

Moving in just before selling could look like a deliberate attempt to avoid capital gains tax.