CGT on a Rental Property

JPin

Hi,

I have a 90% share in a property that I rented out but it has been problematic since I bought it, it was purchased at £69k, however, I received an offer of £170k for it. The person who has a 10% share is happy to sell as they have no tax to pay, however, it's more of an issue for me. 

I currently have an income of around £40k as does my wife who is not on the deeds but is soon to go off work on maternity where her salary will be around 60%.

What are the numbers if I add my wife onto the deeds as a joint title, is there anything else I can do?

Jeremy535897

It may already be too late to transfer half your share to your wife if you have had an offer you are minded to accept.

Keep_pedalling

Do you have any other assets that have made losses you can offset the gain against such as old bank shares?

JPin

Jeremy535897 said:

It may already be too late to transfer half your share to your wife if you have had an offer you are minded to accept.

If I was to sell the house would be going on the market, it's not on the market yet. 

sheramber

You said you had received an offer for it.

Jeremy535897

In principle, if you give half your share of the property to your spouse, then she is taxable on half the gain. That would mean she will have her £12,300 annual exemption (unless used elsewhere) to set against the gain, and some of the taxable gain should be taxed at 18% rather than 28%. The information you provide is insufficient to be precise. See:
https://www.gov.uk/capital-gains-tax/rates

Presumably there is no mortgage on the property?

HMRC could seek to ignore the transfer between spouses if it has no substance (for example if you still receive all the proceeds), or is effectively a gift of half the proceeds rather than half the property (because the sale is already agreed). Some advisers will suggest that a transfer should take place before the decision to sell has even been reached.

Once the gift has happened, your wife will be entitled to, and be assessed on, half the income until it is sold.

If the transfer is done by way of declaration of trust (rather than by transfer of the legal title), the trust will need to be registered.