Transfer of equity

Deano23

Hi 
I am selling my fathers home and was wondering if i can transfer equity of the house into my wife name to reduces the amount of capital gains i would have to pay, because this would take care of the amount we have made on the house.

Slithery

If it's your father's home that's being sold why would you be liable for CGT?

Deano23

Sorry its my house now he died 7 years ago

Tiglet2

I assume you don't live in the house?

Yes, you can do a transfer of equity, but it is better to do it before putting the house up for sale, otherwise HMRC may suspect that the transfer of equity was done purely to save CGT. 

A transfer of equity is where you either add a person to the title or remove a person from the title.  It is not taking a person off the title and putting another person on the title (that is a sale not a TOE).

Slithery

OK then, that makes much more sense.
If you'd transferred the equity to your wife 7 years ago then yes, you could have reduced your CGT. Transferring it now just before a sale to evade tax is something that HMRC will see through straight away.

GDB2222

Why does it matter when you do this transfer? Why would HMRC see through anything?

Do check with a tax advisor, but you can transfer a share of the property to your spouse for any reason, without triggering a CGT charge. 

Slithery

I'm just repeating something I've heard on multiple threads on here over the years but I can't remember the exact details.
Will try to search for some of them and get back to you.....

GDB2222

Slithery said:

I'm just repeating something I've heard on multiple threads on here over the years but I can't remember the exact details.
Will try to search for some of them and get back to you.....

You can start with the gov.uk website.

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

GDB2222

https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-capital-gains-tax-civil-partners-and-spouses-2021

Deano23

So if i did the transfer to my wife and then sell the house we are both using the capital gains allowances so would not have to pat capital gains . if i sell the house by myself i will have to pay capital gains. Don't think we are breaking any laws by doing this. 

GoogleMeNow

Deano23 said:

So if i did the transfer to my wife and then sell the house we are both using the capital gains allowances so would not have to pat capital gains . if i sell the house by myself i will have to pay capital gains. Don't think we are breaking any laws by doing this. 

Is the property registered in your name, rather than your late father's name?  If you are the owner listed on the title, then yes you can add your wife's name to the title as a transfer of equity.   I am assuming there would be no money changing hands, nor is there a mortgage on the property.