Capital gains tax

Happysave5

Hi, I have a stake in a second home. The sale is going through. What can I do after sale of house to avoid capital gains tax? My  main query would be to gift a relative £3000 as normally this is not taxed but not sure if you have to declare first to HRMC? ISA and other ideas would be appreciated, thanks in advance. 

greatcrested

Please explain.You have a 'stake'? You mean you are a joint owner?

If you sell a property which you own or jointly own, and which was not your main residence, you will be liable for CGT.

Making a gift(of any amount) to a relative is toally unrelated and will not affect your CGT liability.

* do you own this property as Joint Tenants or Tenants In Common?

* If TIC, what % do you own?

* when you became the owner, what was the market value?

* what is the current market value?

* you will owe CGT on the amount of increase,less allowable expenses and annual personal allowance.

https://www.gov.uk/capital-gains-tax

Happysave5

OK, I am a joint owner and will have to pay cgt on around nearly 30k after sale of second house. I'm just trying to find out things I can do after sale of house as there is plenty of information before the sale of house to avoid paying cgt. One idea was the gifting of £3000 to a relative but was unsure weather this was aloud before declaring my profit to HMRC. 

hazyjo

Happysave5 said:

OK, I am a joint owner and will have to pay cgt on around nearly 30k after sale of second house. I'm just trying to find out things I can do after sale of house as there is plenty of information before the sale of house to avoid paying cgt. One idea was the gifting of £3000 to a relative but was unsure weather this was aloud before declaring my profit to HMRC. 

Half of that question has been answered. I suggest you answer the questions put to you above in order for anyone to reply further or help you. Thanks.

AnotherJoe

Happysave5 said:

OK, I am a joint owner and will have to pay cgt on around nearly 30k after sale of second house. I'm just trying to find out things I can do after sale of house as there is plenty of information before the sale of house to avoid paying cgt. One idea was the gifting of £3000 to a relative but was unsure weather this was aloud before declaring my profit to HMRC. 

Nothing. You have some misunderstandings about tax.

Gifts arent taxed, of any amount. There's no £3k limit on gifts.

Inheritance tax may come in later for gifts over £3k, but that's different. The initial gift has no tax.

And in any case, this is irrelevant since it doesn't matter what you do with the profits after a sale regarding CGT.

What you do with the profits afterwards doesn't alter the CGT amount.

greatcrested

Happysave5 said:

.... One idea was the gifting of £3000 to a relative but was unsure weather this was aloud before declaring my profit to HMRC. 

Making a gift(of any amount) to a relative is totally unrelated and will not affect your CGT liability.

I suspect you are getting confused with Inheritance tax. Gifts of up to £3000 are permitted and remove the £3K from an Estate for IHT purposes.

* do you own this property as Joint Tenants or Tenants In Common?

* If TIC, what % do you own?

* when you became the owner, what was the market value?

* what is the current market value?

* you will owe CGT on the amount of increase,less allowable expenses and annual personal allowance.

[Deleted User]

Happysave5 said:

OK, I am a joint owner and will have to pay cgt on around nearly 30k after sale of second house. I'm just trying to find out things I can do after sale of house as there is plenty of information before the sale of house to avoid paying cgt. One idea was the gifting of £3000 to a relative but was unsure weather this was aloud before declaring my profit to HMRC. 

Your share of the gain is £30,000? How much CGT do you think you will be to pay on that?

What can you do pre-sale to avoid CGT when selling a home that isn’t your primary residence?  

Happysave5

I'm not confused, maybe I'm not explaining myself correctly. The main question is this, Can I legally move money somewhere else with the profits of the sale of the house to avoid cgt? I can't do anything before the sale now but what can I do after the sale of the house before declaring it? If anything? 

HappyHarry

Happysave5 said:

I'm not confused, maybe I'm not explaining myself correctly. The main question is this, Can I legally move money somewhere else with the profits of the sale of the house to avoid cgt? I can't do anything before the sale now but what can I do after the sale of the house before declaring it? If anything? 

No. As others have already said.

CGT is payable within 30 days of the gain being made.

You could offset the gain against other losses this tax year, if you have any.

You could defer the gain by purchasing an EIS/SEIS with the amount of the gain, but these are very high risk investments where you stand to lose far more than the CGT payable.

Happysave5

Thank you Happy Harry for your answer and everyone else trying to help. 

katsclaws

Any property that is sold after 6 April 2020 that is liable to CGT needs the CGT to be paid within 30 days of the sale.