Reducing CGT due on sale of property

Jeremy535897

silvercar said:

scottishblondie said:

silvercar said:

scottishblondie said:

Keep_pedalling said:

If you are already selling you have missed the boat on doing this.

Obviously I've been living under a rock, because I hadn't realised the changes in CGT allowance over the last few years.  I wanted to clarify if it really is too late, as it seems even if my husband is co-owner from now until the sale goes through in 6-8 weeks it would help with the CGT bill.  I just don't know if that would cause issues with a mortgage for the buyer.

Family member just bought a house and the sellers did exactly this. (For SDLT reasons rather than CGT, but the principle is the same). They did it when the property was on the market. It was a query from the solicitor as to why the deeds had been changed, the sellers replied 'to put the property into the correct ownership to reflect the actual situation' (whatever that is meant to mean!). No problem from the lender or the solicitor.

You would gain a second CGT allowance, but that is only £3,000. Far more important is both your marginal rates of tax.

That's interesting to hear your personal experience, thank you.

We are both higher (Scottish) rate tax payers. I nearly did change the ownership a couple of years back due to income tax purposes - I was pushing the top end of the higher rate tax band with the rental income being added to my employment income, whereas my husband is at the lower end of the tax band and realistically any "profit" was being added to the household pot - but I never got around to it for some reason.  Kicking myself for it now!
 

So the gain is £3,000 x your marginal rate. (is that 42%? = £1260).  The cost is the legal costs of doing it, plus the hassle factor.

24% I think.

Dazed_and_C0nfused

Jeremy535897 said:

silvercar said:

scottishblondie said:

silvercar said:

scottishblondie said:

Keep_pedalling said:

If you are already selling you have missed the boat on doing this.

Obviously I've been living under a rock, because I hadn't realised the changes in CGT allowance over the last few years.  I wanted to clarify if it really is too late, as it seems even if my husband is co-owner from now until the sale goes through in 6-8 weeks it would help with the CGT bill.  I just don't know if that would cause issues with a mortgage for the buyer.

Family member just bought a house and the sellers did exactly this. (For SDLT reasons rather than CGT, but the principle is the same). They did it when the property was on the market. It was a query from the solicitor as to why the deeds had been changed, the sellers replied 'to put the property into the correct ownership to reflect the actual situation' (whatever that is meant to mean!). No problem from the lender or the solicitor.

You would gain a second CGT allowance, but that is only £3,000. Far more important is both your marginal rates of tax.

That's interesting to hear your personal experience, thank you.

We are both higher (Scottish) rate tax payers. I nearly did change the ownership a couple of years back due to income tax purposes - I was pushing the top end of the higher rate tax band with the rental income being added to my employment income, whereas my husband is at the lower end of the tax band and realistically any "profit" was being added to the household pot - but I never got around to it for some reason.  Kicking myself for it now!
 

So the gain is £3,000 x your marginal rate. (is that 42%? = £1260).  The cost is the legal costs of doing it, plus the hassle factor.

24% I think.

And the Scottish rate bands are ignored, it's the UK rate bands that apply for CGT.

https://www.litrg.org.uk/savings-property/capital-gains-tax#11

silvercar

Jeremy535897 said:

silvercar said:

scottishblondie said:

silvercar said:

scottishblondie said:

Keep_pedalling said:

If you are already selling you have missed the boat on doing this.

Obviously I've been living under a rock, because I hadn't realised the changes in CGT allowance over the last few years.  I wanted to clarify if it really is too late, as it seems even if my husband is co-owner from now until the sale goes through in 6-8 weeks it would help with the CGT bill.  I just don't know if that would cause issues with a mortgage for the buyer.

Family member just bought a house and the sellers did exactly this. (For SDLT reasons rather than CGT, but the principle is the same). They did it when the property was on the market. It was a query from the solicitor as to why the deeds had been changed, the sellers replied 'to put the property into the correct ownership to reflect the actual situation' (whatever that is meant to mean!). No problem from the lender or the solicitor.

You would gain a second CGT allowance, but that is only £3,000. Far more important is both your marginal rates of tax.

That's interesting to hear your personal experience, thank you.

We are both higher (Scottish) rate tax payers. I nearly did change the ownership a couple of years back due to income tax purposes - I was pushing the top end of the higher rate tax band with the rental income being added to my employment income, whereas my husband is at the lower end of the tax band and realistically any "profit" was being added to the household pot - but I never got around to it for some reason.  Kicking myself for it now!
 

So the gain is £3,000 x your marginal rate. (is that 42%? = £1260).  The cost is the legal costs of doing it, plus the hassle factor.

24% I think.

Dazed_and_C0nfused said:

Jeremy535897 said:

silvercar said:

scottishblondie said:

silvercar said:

scottishblondie said:

Keep_pedalling said:

If you are already selling you have missed the boat on doing this.

Obviously I've been living under a rock, because I hadn't realised the changes in CGT allowance over the last few years.  I wanted to clarify if it really is too late, as it seems even if my husband is co-owner from now until the sale goes through in 6-8 weeks it would help with the CGT bill.  I just don't know if that would cause issues with a mortgage for the buyer.

Family member just bought a house and the sellers did exactly this. (For SDLT reasons rather than CGT, but the principle is the same). They did it when the property was on the market. It was a query from the solicitor as to why the deeds had been changed, the sellers replied 'to put the property into the correct ownership to reflect the actual situation' (whatever that is meant to mean!). No problem from the lender or the solicitor.

You would gain a second CGT allowance, but that is only £3,000. Far more important is both your marginal rates of tax.

That's interesting to hear your personal experience, thank you.

We are both higher (Scottish) rate tax payers. I nearly did change the ownership a couple of years back due to income tax purposes - I was pushing the top end of the higher rate tax band with the rental income being added to my employment income, whereas my husband is at the lower end of the tax band and realistically any "profit" was being added to the household pot - but I never got around to it for some reason.  Kicking myself for it now!
 

So the gain is £3,000 x your marginal rate. (is that 42%? = £1260).  The cost is the legal costs of doing it, plus the hassle factor.

24% I think.

And the Scottish rate bands are ignored, it's the UK rate bands that apply for CGT.

https://www.litrg.org.uk/savings-property/capital-gains-tax#11

I was looking up higher rate tax in Scotland. 

At 24%, the saving is £3,000 x 24% = £720.  

silvercar

Jeremy535897 said:

silvercar said:

scottishblondie said:

silvercar said:

scottishblondie said:

Keep_pedalling said:

If you are already selling you have missed the boat on doing this.

Obviously I've been living under a rock, because I hadn't realised the changes in CGT allowance over the last few years.  I wanted to clarify if it really is too late, as it seems even if my husband is co-owner from now until the sale goes through in 6-8 weeks it would help with the CGT bill.  I just don't know if that would cause issues with a mortgage for the buyer.

Family member just bought a house and the sellers did exactly this. (For SDLT reasons rather than CGT, but the principle is the same). They did it when the property was on the market. It was a query from the solicitor as to why the deeds had been changed, the sellers replied 'to put the property into the correct ownership to reflect the actual situation' (whatever that is meant to mean!). No problem from the lender or the solicitor.

You would gain a second CGT allowance, but that is only £3,000. Far more important is both your marginal rates of tax.

That's interesting to hear your personal experience, thank you.

We are both higher (Scottish) rate tax payers. I nearly did change the ownership a couple of years back due to income tax purposes - I was pushing the top end of the higher rate tax band with the rental income being added to my employment income, whereas my husband is at the lower end of the tax band and realistically any "profit" was being added to the household pot - but I never got around to it for some reason.  Kicking myself for it now!
 

So the gain is £3,000 x your marginal rate. (is that 42%? = £1260).  The cost is the legal costs of doing it, plus the hassle factor.

24% I think.

Dazed_and_C0nfused said:

Jeremy535897 said:

silvercar said:

scottishblondie said:

silvercar said:

scottishblondie said:

Keep_pedalling said:

If you are already selling you have missed the boat on doing this.

Obviously I've been living under a rock, because I hadn't realised the changes in CGT allowance over the last few years.  I wanted to clarify if it really is too late, as it seems even if my husband is co-owner from now until the sale goes through in 6-8 weeks it would help with the CGT bill.  I just don't know if that would cause issues with a mortgage for the buyer.

Family member just bought a house and the sellers did exactly this. (For SDLT reasons rather than CGT, but the principle is the same). They did it when the property was on the market. It was a query from the solicitor as to why the deeds had been changed, the sellers replied 'to put the property into the correct ownership to reflect the actual situation' (whatever that is meant to mean!). No problem from the lender or the solicitor.

You would gain a second CGT allowance, but that is only £3,000. Far more important is both your marginal rates of tax.

That's interesting to hear your personal experience, thank you.

We are both higher (Scottish) rate tax payers. I nearly did change the ownership a couple of years back due to income tax purposes - I was pushing the top end of the higher rate tax band with the rental income being added to my employment income, whereas my husband is at the lower end of the tax band and realistically any "profit" was being added to the household pot - but I never got around to it for some reason.  Kicking myself for it now!
 

So the gain is £3,000 x your marginal rate. (is that 42%? = £1260).  The cost is the legal costs of doing it, plus the hassle factor.

24% I think.

And the Scottish rate bands are ignored, it's the UK rate bands that apply for CGT.

https://www.litrg.org.uk/savings-property/capital-gains-tax#11

I was looking up higher rate tax in Scotland. 

At 24%, the saving is £3,000 x 24% = £720.  

fimacdoodle

I looked at this when selling a rental - it was not worth the hassle for the low allowance you get. Remember all your expenses though - and read up on all the deductions you can make on the tax website (most is straightforwards) and your exposure to the tax will fall.