Sale of wife's house

evets500

Hi

My wife and myself were recently married and she moved into my home, which I own outright with no mortgage. She has her own home, which she also owns outright with no mortgage. She now wants to sell her home but we're not sure if there may be any tax/taxes that may be payable (IT, CGT etc) on the sale of her property.

Please could anyone advise on this situation and any other advice that may be relevant would be most appreciated.

Many thanks

sammyjammy

I imagine value of her house now is around the same as it was when she moved out so no taxes due, income or Capital gains assuming she lived in it the whole time she owned it up until the time she moved into yours.

SiliconChip

The only tax that could apply is Capital Gains Tax, but if your wife lived in her house as her main home until recently then she will almost certainly be covered by Private Residential Relief so she'll have nothing to pay. Use the gov.uk pages to check.

https://www.gov.uk/tax-sell-property

tacpot12

Assumign the home is in the UK, it is likely that she will be able to meet the requirements to qualify for Private Residence Relief (see here): Tax when you sell your home: Private Residence Relief - GOV.UK (www.gov.uk)

If she qualifies for this relief there will be no Capital Gains Tax (CGT) to pay.

Whether or not there is any Inheritance Tax (IHT) to pay depends on what she does with the proceeds of the sale before she dies. If she leaves everything to you, there will be no IHT.  If she leaves the money to other people or gives it away, then some IHT may be payable, but not until after she dies, which will hopefully be many years in the future.  

There would be no Stamp Duty Land Tax (SDLT) assuming you wanted to give your wife half of your house (so that she becomes an owner either as a joint tenant or as tenants-in-common). The person buying her house will have to pay SDLT if the property meets the criteria to do so, but this is their problem.

There would no Income Tax payable when the home is sold, but if she saves or invests the money, unless she can do so within a Pension or ISA, so income tax will be payable on it. Depending on your or her tax situations it might make sense for her to give you a proportion of the money so that you make best use of your respective tax and ISA allowances.

Jeremy535897

Most of the gain (all the time she lived in the property as her main residence, at least up to the date of marriage, plus the last 9 months) should be exempt. See:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2023
Note particularly example 3 about nominations.