CGT with spouse

boycie10

I was left a property a few years ago when my mother died, it was worth aprox £150,000. I didn't get round to changing the ownership over to my name, It is not my main property of residence. I have recently been renting it out but do not declare the income because other than a small pension I don't have any income so don't reach the income tax threshold.
I am considering selling the property but the CGT payable on the sale would be very large even though it hasn't increased a lot in value.
My question is this, Can I put the property in joint names with my spouse and would this reduce the CGT that we have to pay because of two CGT allowances?
Also is there a length of time that she would need to be a joint owner before we can sell it use her allowance?
Many thanks

BoGoF

If you didnt transfer it to your name, who's name is it then?

Mojisola

boycie10 wrote: »

the CGT payable on the sale would be very large even though it hasn't increased a lot in value.

Why? Won't the capital gain be the difference between the value at the time of inheritance and the sale price now? If that isn't very large, the tax bill shouldn't be big, either.

boycie10

BoGoF wrote: »

If you didnt transfer it to your name, who's name is it then?

My mothers

boycie10

Mojisola wrote: »

Why? Won't the capital gain be the difference between the value at the time of inheritance and the sale price now? If that isn't very large, the tax bill shouldn't be big, either.

I thought that because I didn't pay anything for the property then I have gained the total sale price with no initial outlay on my part, so I have to pay CGT on the total sale price
Have I got the rules wrong?

BoGoF

So has the estate actually been finalised? There is potential that the rental income may belong to the estate and liable to income tax.

boycie10

BoGoF wrote: »

So has the estate actually been finalised? There is potential that the rental income may belong to the estate and liable to income tax.

I was the sole beneficiary of her estate but I can't remember any official documentation relating to change of name of the house

kidmugsy

boycie10 wrote: »

I thought that because I didn't pay anything for the property then I have gained the total sale price with no initial outlay on my part, so I have to pay CGT on the total sale price
Have I got the rules wrong?

Yes, you've got them wrong.

Were you her executor? Did you get probate on the estate?

Anyway, if the house did legally become yours, the capital gain is the difference between what you get for it now and what it was worth when you inherited it (or maybe what it was worth when she died, but those will presumably be much the same thing).

boycie10

Yes I got probate, and was the executor.

boycie10

kidmugsy wrote: »

Yes, you've got them wrong.

Were you her executor? Did you get probate on the estate?

Anyway, if the house did legally become yours, the capital gain is the difference between what you get for it now and what it was worth when you inherited it (or maybe what it was worth when she died, but those will presumably be much the same thing).

Thanks for putting me straight on that one, that is good news
when I've sold the house how do I find out what it was exactly what it was worth at the time that I inherited the house, so that I can calculate any CGT that I may owe, which sounds doubtful now?

00ec25

boycie10 wrote: »

Thanks for putting me straight on that one, that is good news
when I've sold the house how do I find out what it was exactly what it was worth at the time that I inherited the house, so that I can calculate any CGT that I may owe, which sounds doubtful now?

you research the sold prices (not the asking prices) of as near to identical as you can get within a "reasonable" distance of your mother's property at the time she died. That way you have a basis for saying hers is similar and was thus worth £x when she died.

HMRC will check the value you use so make sure it is sensible. You may need to pay a valuer to do it for you and then be ready to defend their figure to HMRC.