Can money I've made be put in husband's name?

SouthernWeegie

I've had a search about on this site and forum but haven't found the answer to this specific question - sorry if it's answered somewhere already.

I recently sold a property that I co-owned with my brother. My brother and I acquired it in 2006, before my husband and I were married (2010). At the moment both my husband and I are in the same tax bracket, but I'll be moving into the higher rate this year. Is it legitimate for me to give my husband some of the money made from the sale of the property for him to invest in his sole name, to avoid paying higher tax on the interest?

NB we will of course both use our full ISA allowances for both years before putting what's left over into savings.

(As a secondary question, it looks to me as if it's barely worth locking savings away for a fixed term at the moment as the difference in interest rates are marginal - thoughts welcome. I'm not sure exactly how much will be left but probably in the region of £20k. We're keen on ethical investing.)

Advice gratefully received!

kidmugsy

SouthernWeegie wrote: »

Is it legitimate for me to give my husband some of the money made from the sale of the property for him to invest in his sole name, to avoid paying higher tax on the interest?

Yes it is. The money, of course, becomes his.

atush

If you can trust him not to spend it, sure.

But, how much CGT did you pay on the sale? you could have transferred half your share to him before the sale and saved on CGT.

SouthernWeegie

Good question - and this is taking us down another route...the property was a gift from my parents, and wasn't valued at the time of the transfer. So, as far as we can make out, my brother and I will have to calculate what we think CGT should be on the property, based on the movement in the property market in that area and on that kind of property, and declare it in our tax return. Sounds like if we'd been on the ball I could have done as you suggest and transfer half of my share to my husband; to be honest I wasn't really aware of that as a money saving option. But I'd also be grateful for views on the CGT issue - are my brother and I right?

atush

Technically, your CGT allowance begins in the value at the date of transfer. You can ask a local agent to help you with a price?


But, did your parents continue to live in it w/o paying market rent after they gave it to you? This could be a gift with reservation of benefit sho the value would remain in their estate. Are they still alive?

joerugby

There is no such thing as "putting money in my husband's name". What you are proposing is "giving the money to my husband". If you are happy with that then go ahead.

SouthernWeegie

atush wrote: »

But, did your parents continue to live in it w/o paying market rent after they gave it to you? This could be a gift with reservation of benefit sho the value would remain in their estate. Are they still alive?

They are still alive, but, they never lived in it - it was rented out as a holiday property.

thenudeone

It is perfectly legitimate for legal spouses to swap money and property between each other to save tax. It's one of the benefits of marriage.

atush

So the value for CGT purposes is the value at the date of transfer.

As a side note your parents basically disposed of the property and were liable for CGT on the difference in value from when they bought it to the day they gave it to you. AS it wasn't their home at any point, there isn't residence relief.

Did they pay CGT?

SouthernWeegie

atush wrote: »

As a side note your parents basically disposed of the property and were liable for CGT on the difference in value from when they bought it to the day they gave it to you. AS it wasn't their home at any point, there isn't residence relief.

Did they pay CGT?

No, they didn't - they did look into it but couldn't get clear advice at the time I believe, so we assumed it would be sorted out when it was eventually sold. So if I've understood right, they are still liable for CGT on the difference in value from when they bought it to when they gave it to us, and we're liable for the difference from then (2006) until now?

atush

Yes, but I hope they wont' get into trouble for not paying at the time. If they both owned it, they will get 2 cgt exemptions.