Cgt payable by partner on death if i gift property under ‘joint tenants’

DeeSpare

Hello
i am a bit confused on figures on this one and wondered if someone could help please?
Rental Property Purchased in 1990 for 20,000
property now worth 120,000
gain (with no reliefs) 10pk
held in own name

if move half into spoused name under JOINT tenants, and i die first, i understand the gain is treated as if they bought the property the same time as me . However does the gain still apply to the whole (ie for simplicities sake 100k as above) or half ie treated as
half purchased at 10k, 1/2 value of property 60k (as other half is ‘inherited’) so gain 50k

Or is it the case that because its joint tenants that we would be classed as sort of owning all of each , therefore none of it ‘inherited’ as such.

sorry if thats confusing!

Jeremy535897

The surviving spouse is treated as acquiring half the property for £10,000, and half for the market value at the date of death. You would assume £60,000, but there may be a small reduction for the fact that a half share of an asset is worth less than half of the full asset. Just because the half passes by survivorship does not mean that you aren't treated as inheriting it for this purpose.

DeeSpare

Hi Jeremy, thankyou for answering this. 

My main worry i read that joint tenancies mean effectively you own the ‘whole property’ so worried that it would be treated as such for cgt, I like joint tenancies because lack of probate and certainty of no contest in the will etc.

Jeremy535897

However, if a claim is made against an estate under The Inheritance (Provision for Family and Dependants) Act 1975, a joint tenancy may be severed in certain circumstances. It doesn't make a claim more likely to succeed, but it doesn't rule it out.

DeeSpare

Blimey, i didnt know that thankyou. It seems you cant leave your own money to who you want these days. Wills can be contested, and now joint tenancies severed…its become a strange old world . Its almost as if your ‘will’ is merely your ‘hope’ 😟

Jeremy535897

It is in section 9:
https://www.legislation.gov.uk/ukpga/1975/63/section/9

The reference to capital transfer tax is taken to be a reference to inheritance tax.

Keep_pedalling

DeeSpare said:

Blimey, i didnt know that thankyou. It seems you cant leave your own money to who you want these days. Wills can be contested, and now joint tenancies severed…its become a strange old world . Its almost as if your ‘will’ is merely your ‘hope’ 😟

Nothing has changed really, anyone can challenge a will but few actually succeed. 

DeeSpare

Keep-pedalling. Oh thats good then…plan b was to transfer everything to my spouse in the hope that that might prevent anything being contested…but then they would have more cgt to pay.

Thrugelmir

In your title you say partner, then in the thread spouse.  Are you married?  

DeeSpare

Yes I am married. I use the terms interchangeably. My apologies for any confusion caused.thanks