Selling a rented flat

lozzy1965

I have a flat bought in 1990 which I am just selling.
I lived in it for 3 years and it has been rented on and off since.
I was wondering how best to reduce the CGT on the sale?


Unfortunately I seem to be too late to switch it into joint names with the wife (I should have done this before putting it up for sale apparently ).


I seem to remember something about having lived there allowing some relief?


Also, I have some capital losses from shares I own I could realise.


Can my wife transfer loss making shares to my name within the same tax year, so I can realise those losses too?


Thanks in anticipation of any advice

Tom99

[FONT=Verdana, sans-serif]If the cost of the 50% transfer to wife is low you could always do that ASAP, submit two CGT returns and see if it is challenged. I don't think you could any up any worse off than you are now so no harm in trying.[/FONT]
[FONT=Verdana, sans-serif]It might take you 6 mths to sell after all.[/FONT]

lozzy1965

I've just accepted an offer from a cash buyer - so if that goes through it'll be quite quick. I wanted it to sell in the next tax year - due to capital gains this year. The tenants handed their notice in so I thought 'perfect timing' - not realising the timing of a switch to joint ownership would be viewed as tax avoidance - which it is - but so is putting money into an ISA .
Like you say, might be worth trying anyway. It's £20 or £40 to change it.
I think I'll get all the losses I can into my name anyway and go from there.
Is the housing forum the best place to ask about taper relief?

Tom99

Do you mean letting relief:

https://www.taxinsider.co.uk/1383-Lettings_Relief_Tips_And_Traps.html

lozzy1965

That's the kiddo! I have found lots of similar articles by Googling, and was hoping for something a little more up to date (though it may not have changed - that article is dated 2015).
I do also tend to find my head hurting when I try to apply it to my precise circumstances!
I was also a little concerned not to find any mention of it on the HMRC calculator - but maybe that's because it is only built for simple sales (and they don't want to shout about how much tax you could save!)

00ec25

lozzy1965 wrote: »

That's the kiddo! I have found lots of similar articles by Googling, and was hoping for something a little more up to date (though it may not have changed - that article is dated 2015).
I do also tend to find my head hurting when I try to apply it to my precise circumstances!
I was also a little concerned not to find any mention of it on the HMRC calculator - but maybe that's because it is only built for simple sales (and they don't want to shout about how much tax you could save!)

rather than me write it all out again, please read #2 in the thread below for the mechanics of the calculation of CGT for a rented property that was once your main home

http://forums.moneysavingexpert.com/showthread.php?t=5764759

bear in mind transfer ownership to the wife will be notified to HMRC by the land registry so as you rightly say doing that whilst already on the market for sale would likely result in HMRC invoking "settlements legislation" and overruling the transfer as done purely to avoid tax

you can't transfer a realised share loss
you can transfer shares which the wife then sells for a loss, that would be less likely to be spotted by an HMRC computer

feel free to post up your own calculation , there are plenty of people on here who will/can check it for you (but prefer not to do the sums for you in the first place )

lozzy1965

00ec25 wrote: »

you can't transfer a realised share loss
you can transfer shares which the wife then sells for a loss, that would be less likely to be spotted by an HMRC computer

Interesting comment. It is ok to transfer shares between spouses in order to split a capital gain (ie. Tax Avoidance), but not to transfer losses to set against other gains (ie. a different kind of Tax Avoidance).
One wonders why transfers between spouses is allowed if it is regarded as Tax Avoidance - I can't think why anyone would do it otherwise.

[Deleted User]

lozzy1965 wrote: »

Interesting comment. It is ok to transfer shares between spouses in order to split a capital gain (ie. Tax Avoidance), but not to transfer losses to set against other gains (ie. a different kind of Tax Avoidance).
One wonders why transfers between spouses is allowed if it is regarded as Tax Avoidance - I can't think why anyone would do it otherwise.

Unfortunately good tax planning is not always tax avoidance. Before independent taxation there were many more opportunities to minimise tax liabilities (who remembers Wife's Earnings election?) There aren't many left!

00ec25

lozzy1965 wrote: »

Interesting comment. It is ok to transfer shares between spouses in order to split a capital gain (ie. Tax Avoidance), but not to transfer losses to set against other gains (ie. a different kind of Tax Avoidance).
One wonders why transfers between spouses is allowed if it is regarded as Tax Avoidance - I can't think why anyone would do it otherwise.

did you note my use of the word realised losses?

you can't sell something and then try and claim oh but actually the wife sold it, as it was hers (after the event)