Minimising CGT on second property when ex-partner is 'buying me out'

Giles_H

I'm looking into options for the process of being 'bought out' by my ex-partner for the property we co-own.

We've had the property for c13 years and during that time, we've shared the mortgage payments and (some) of the bills. The property has never been my primary residence, but it has/is for her.

She would like to remain in the property, so we're not looking to sell it, but she would like to buy-out my share of the equity, transfer the deeds solely into her name and take on the mortgage herself.

We're in the process of getting the property valued and the estimate is that there's at least £100K of equity at today's market price (ie. my share of the equity for her to buy-out would be c£50K).

What are the options and processes for doing this, while ensuring that I pay as little Capital Gains Tax as possible? The situation is amicable between us and there's not a tight deadline for getting this sorted out.

My thoughts were:-

• Could I simply get my name removed from the deeds and then my partner 'gift' the £50K through the deed of gift mechanism?
• Could I gift her my share of the property and she then gifts me the value of the equity in return?
• Could we phase the process over a couple of years to make use of the annual CGT exemption (ie. release my equity over a period of time and take out £12,300 over say 4x years)?
• What criteria needs to be met for me to establish the property as my primary residence and for how long?

Many thanks 

G.

[Deleted User]

The first two are complete non-starters. In the second one, for example, you are ‘gifting’ your share of the property on the condition that you receive an equivalent gift back - hardly a gift!

In the third ‘option’ , while I suppose it is possible to dispose of a certain percentage bit by bit, is it really practical? You should remember that it is the date of disposal that is relevant, not how the monies are paid. Others more knowledgeable than I may wish to further comment.

On the final point, main residence is a matter of fact. The property was never your main residence up to the point of sale and never can be. To illustrate, if you did move into the property now and lived there for twelve years and three months only half of the gain would qualify for main residence relief.