transfer of flat ownership

heron8888

I jointly own a buy to let flat valued at 100,000 which is nearly paid off, so there is no mortgage interest to offset against tax we both pay 40 percent tax.
Can I pay off remaining amount of mortgage and transfer ownership to my daughter who earns very little ? and is there any tax to pay ? or would it be best to remortgage? any ideas appreciated

CLAPTON

heron8888 wrote: »

I jointly own a buy to let flat valued at 100,000 which is nearly paid off, so there is no mortgage interest to offset against tax we both pay 40 percent tax.
Can I pay off remaining amount of mortgage and transfer ownership to my daughter who earns very little ? and is there any tax to pay ? or would it be best to remortgage? any ideas appreciated

who do you co-own the flat with?

heron8888

I own it with my brother equally and we are both higher tax payers and both have a family member we would like to transfer ownership to

CLAPTON

heron8888 wrote: »

I own it with my brother equally and we are both higher tax payers and both have a family member we would like to transfer ownership to

assuming you own the flat as tenants in common, then you can transfer / give/ sell your share

there will be a potential capital gains tax depending upon the details of the situation

heron8888

What situations lead to capital gains tax/

CLAPTON

heron8888 wrote: »

What situations lead to capital gains tax/

cgt is applied to capital gains i.e. the difference between buying and selling price less costs and allowances

for this purpose, disposing of a property to a relative (other than legal spouse) counts as a sale

heron8888

It is worth 15000 more than we paid for it, so would we pay 40 percent on that amount?

purdyoaten

heron8888 wrote: »

It is worth 15000 more than we paid for it, so would we pay 40 percent on that amount?

No - you each have tax free exemption of £11000. As an aside Capital gains is charged at 28% for higher rate taxpayers.

CLAPTON

heron8888 wrote: »

It is worth 15000 more than we paid for it, so would we pay 40 percent on that amount?

if it's worth 15k more then paid, presumably your share would be 7,500 so less than your annual cgt allowance of 11,000; so no tax payable