Reducing CGT

steve2005

getmore4less wrote: »

Were you married?

HMRC say you can't do that if you both want to own the property.

http://www.hmrc.gov.uk/manuals/pimmanual/pim1030.htm

No, we got married in April

Suarez

steve2005 wrote: »

Thanks for the replies so far.

Yes we were declaring income, but didn't need to do a tax return as the amount received from rent did not go over the yearly tax allowance as wife has been a student for years it was rented.

You were renting a £300k property for less than £2,500 income per year?

steve2005

Suarez wrote: »

You were renting a £300k property for less than £2,500 income per year?

£2,500 a year? As in little over £200 a month?
Err, no.

But anyway, the value of the house was not 300k when we started the rental, that's what we're selling it for now.

TheCyclingProgrammer

Suarez wrote: »

You were renting a £300k property for less than £2,500 income per year?

Tax free allowance isn't £2500. If your rental income is within your personal allowance you have no tax to pay and nothing to notify HMRC about.

I think perhaps you're referring to the limit on which rental income can be collected through your tax code. The HMRC website isn't very well written but if you read the bit about whether you need to complete a tax return or not, it clearly states that those limits only apply if you're already taxed via PAYE. If your not on PAYE, as in OPs wife's case then you only have an obligation to notify HMRC if you're chargeable to tax. This is what the law says.

steve2005

TheCyclingProgrammer wrote: »

Tax free allowance isn't £2500. If your rental income is within your personal allowance you have no tax to pay and nothing to notify HMRC about.

I think perhaps you're referring to the limit on which rental income can be collected through your tax code. The HMRC website isn't very well written but if you read the bit about whether you need to complete a tax return or not, it clearly states that those limits only apply if you're already taxed via PAYE. If your not on PAYE, as in OPs wife's case then you only have an obligation to notify HMRC if you're chargeable to tax. This is what the law says.

Don't we (I, or me and the wife) know it!
We've got a good accountant now so hopefully they'll be able to guide us correctly.