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CGT on future sale of BTL property?

M3_Sussex
M3_Sussex Posts: 351 Forumite
Part of the Furniture Combo Breaker
in House buying, renting & selling
If I add my sons name to the deeds for my BTL property, can I then use his capital gains allowance in addition to mine when I come to sell the property? I don't plan to sell until I've owned it for at lest 10 years and I've only owned it for 3 years so far.
Just thinking of the future. ;)
«1

Comments

  • porridge
    porridge Posts: 94 Forumite
    M3_Sussex wrote: »
    If I add my sons name to the deeds for my BTL property, can I then use his capital gains allowance in addition to mine when I come to sell the property? I don't plan to sell until I've owned it for at lest 10 years and I've only owned it for 3 years so far.
    Just thinking of the future. ;)


    You can move into the BTL and avoid any CGT
  • M3_Sussex
    M3_Sussex Posts: 351 Forumite
    Part of the Furniture Combo Breaker
    porridge wrote: »
    You can move into the BTL and avoid any CGT

    It's next door to me and exactly the same as my house. I think the IR may be suspicious of my motives!!!
  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
    Part of the Furniture Combo Breaker
    Gifting half of the property to your son could make you liable for CGT at the point of transfer as well as Stamp Duty if applicable. You can gift between husband and wife with no problems.

    I don't know much about moving in and avoiding CGT. If that was possible I'd expect the loop-hole to be closed.

    You could try Landlordzone for more informed advice but, as always, beware of t'Interweb 'experts'.

    :)

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • porridge
    porridge Posts: 94 Forumite
    M3_Sussex wrote: »
    It's next door to me and exactly the same as my house. I think the IR may be suspicious of my motives!!!

    I think it is quite plausable to sell your house and move into the BTL, it would become your main residence.
  • Ian_W
    Ian_W Posts: 3,778 Forumite
    Part of the Furniture 1,000 Posts Photogenic
    porridge wrote: »
    You can move into the BTL and avoid any CGT
    Maybe, maybe not. Your PPR relief is the period it was your residence and the last 3yrs ownership so own for 10yrs and move in just before you sell will give you 3/10ths relief on the gain. You can also get up to £40K letting relief with PPR so with taper and your CGT allowance it may cover it and would certainly reduce any liability.
    However, you'd need to be resident for a while, probably 6+ months and the Revenue would be very interested in what you do with your other house, so you'd probably need to let it or sell it for them to accept it as genuine.
    See:
    https://www.hmrc.gov.uk/pdfs/2003_04/capital_gains/ir283.pdf
    and this may also be of interest:
    https://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=92281&re=1281&ea=152273
  • silvercar
    silvercar Posts: 50,881 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    If you transfer half now, that half incurs a CGT liability for you NOW.

    Your son being a (half) property owner could create problems for him in owning his own home, declaring rental income, claiming benefits, divorce, debt problems etc. etc
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • M3_Sussex
    M3_Sussex Posts: 351 Forumite
    Part of the Furniture Combo Breaker
    OK, thanks for your replies. Looks like this is not a good idea.
  • Broken_hearted
    Broken_hearted Posts: 9,553 Forumite
    How old is your son will he be able to live in the house before you sell it.
    Barclaycard 3800

    Nothing to do but hibernate till spring
  • M3_Sussex
    M3_Sussex Posts: 351 Forumite
    Part of the Furniture Combo Breaker
    Broken_hearted wrote: »
    How old is your son will he be able to live in the house before you sell it.

    He's 24...
  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
    Part of the Furniture Combo Breaker
    Maybe you could transfer just enough to avoid CGT i.e., a %age of the property up to a value that would attract CGT of £9,200 so about £23K worth of house. You could this again in the next financial year until you have gifted as much as you wish.

    :)

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
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