Removing my name from joint title deeds

silvercar

Gonzo1975 said:

silvercar said:

Bookworm105 said:

Gonzo1975 said:

Apologies, I just started reading up on CGT, does this quote come into play for my ex in this scenario?

"You won't pay capital gains tax if the property is your only home."

It is her only home.

but you are co owner of it and you no longer live there so it is you, not her, who face the prospect of CGT given you were not married to her

He’s giving it away for £0, to an unrelated (never married) person. So is there a gain? If they were married it would be deemed to be between connected parties and therefore at market value, but for unrelated people it may be the actual consideration ie £0. So no gain, no CGT?

Appreciate your words Silvercar and it is frustrating that I get hit with a whopping tax bill for giving something away, I don’t see how I am gaining anything but the wording on the gov website is pretty clear about it. Even if I put it in one of my children’s names, I still have to pay the CGT.

Maybe your ex would pay? Otherwise you will always be tied and she may be concerned that you would make a claim on the equity in the future?

pumas

Are you tenants-in-common? If you've not lived there for 10 years, could your share be seen as less than 50%

silvercar

And the value of half a property with the other half occupied isn’t half the market value. I’ve seen reductions of around 15% quoted. 

Bookworm105

silvercar said:

Bookworm105 said:

Gonzo1975 said:

Apologies, I just started reading up on CGT, does this quote come into play for my ex in this scenario?

"You won't pay capital gains tax if the property is your only home."

It is her only home.

but you are co owner of it and you no longer live there so it is you, not her, who face the prospect of CGT given you were not married to her

He’s giving it away for £0, to an unrelated (never married) person. So is there a gain? If they were married it would be deemed to be between connected parties and therefore at market value, but for unrelated people it may be the actual consideration ie £0. So no gain, no CGT?

 it is not a gift at arm's length since, despite not married, there is a very obvious relationship between the 2 parties.
market value would apply

saajan_12

silvercar said:

Bookworm105 said:

Gonzo1975 said:

Apologies, I just started reading up on CGT, does this quote come into play for my ex in this scenario?

"You won't pay capital gains tax if the property is your only home."

It is her only home.

but you are co owner of it and you no longer live there so it is you, not her, who face the prospect of CGT given you were not married to her

He’s giving it away for £0, to an unrelated (never married) person. So is there a gain? If they were married it would be deemed to be between connected parties and therefore at market value, but for unrelated people it may be the actual consideration ie £0. So no gain, no CGT?

No, CGT is based on the value, unlike SDLT which is based on consideration. 
To determine the value, the assumption is that unconnected persons would pay/receive an amount approximately equal to the value, since why would you give a stranger a gift? For connected persons HMRC is more sceptical and you have to specifically state the value. However if its a gift then clearly its not worth £0, so CGT would be based on the value. 

@OP, the point is you had an asset that gained £x and were able to gift something that much more valuable. I would suggest checking 
* what your share was - presumably if your ex was the one living there, paying off the capital off the mortgage, doing any improvements for the last 10 years, then she is the benficial owner of a larger share. 
* whether ex will pay something, approx your CGT to buy you out. 

Remember leaving it in your name doesnt' get rid of the CGT problem.. if ex ever goes to sell, or if you need to raise a mortgage and need to get off this one, then the CGT will come back up. 

AskAsk

silvercar said:

Bookworm105 said:

Gonzo1975 said:

Apologies, I just started reading up on CGT, does this quote come into play for my ex in this scenario?

"You won't pay capital gains tax if the property is your only home."

It is her only home.

but you are co owner of it and you no longer live there so it is you, not her, who face the prospect of CGT given you were not married to her

He’s giving it away for £0, to an unrelated (never married) person. So is there a gain? If they were married it would be deemed to be between connected parties and therefore at market value, but for unrelated people it may be the actual consideration ie £0. So no gain, no CGT?

CGT is complicated and this article below, states that you can still be liable for CGT even if you give away your main residence if you haven't lived there.

Do I need to pay Capital Gains Tax if I am giving equity away?

Maybe. You may still need to pay CGT even if you don’t receive anything in exchange for the equity you have given to someone else. Whether CGT is due depends primarily on who you give the property to:

Transfers to a spouse, civil partner or charity

If you are ‘gifting’ (giving away) the property or a share in the property, to a spouse, civil partner or charity, you would not have to pay any CGT.

Transferring equity to a child, sibling or another person

If you transfer equity in a property to a child, sibling or a person that is not your spouse or civil partner, you may need to pay CGT.

The amount of CGT you will need to pay will be calculated based on the increase in value since you acquired the property (or your share of the property).

Although CGT is due if you give away your main residence, you may be able to get full relief (Principal Private Residence Relief). Full relief would mean you pay no CGT. There are restrictions on this relief, including a requirement that you must have used the property as your main residence for the entire time you owned the property.

Emmia

OP if you don't remove yourself, what happens if you die? Do you have a will that either leaves the property share to your ex, or to your children?

Gonzo1975

Lots of questions and comments which I thank you for.
More context to how I got here, and yes I know most people will think I’m being a mug, but I honestly do not have the mental stamina to get my equity from her.

We split 17 years ago. I cheated and left her and my children in the house. I paid all the mortgage payments as well as 25% of my salary as child maintenance.

Our relationship remained amicable and I had unlimited access to my children. In truth I carried a huge guilt for leaving her a single mother.

The mortgage is now cleared and I am about to retire with a nice lump sum that will allow me to purchase a new home outright.

Originally I wanted half the equity out of the house but she made it clear she would fight it. Taking her to court to force her to sell would see her turn my children against me, telling them I have made them homeless.

I know I can charge her half the rental value each month but again she would pass that onto the children in higher housekeep and blame me.

When the idea of signing my half of the property over to the kids came to me I felt relief. Until I looked into the cost.
When I told the ex she said she would happily sign her half over to them too.

I decided the cheapest option was to just remove my name and leave it to her to leave the house to them in a will. This is all very recent and now I realise CGT plays a big part I feel the best option is just to leave it as is.

The children know the house is effectively theirs and I know there is no way the ex would go against that.

So I do thank you all for your comments and help but for me this thread can now be closed.

pumas

But will you need to pay SDLT surcharge if you buy another property?
Why don't you have a free 30 min chat with a solicitor?

housebuyer143

Gonzo1975 said:

Lots of questions and comments which I thank you for.
More context to how I got here, and yes I know most people will think I’m being a mug, but I honestly do not have the mental stamina to get my equity from her.

We split 17 years ago. I cheated and left her and my children in the house. I paid all the mortgage payments as well as 25% of my salary as child maintenance.

Our relationship remained amicable and I had unlimited access to my children. In truth I carried a huge guilt for leaving her a single mother.

The mortgage is now cleared and I am about to retire with a nice lump sum that will allow me to purchase a new home outright.

Originally I wanted half the equity out of the house but she made it clear she would fight it. Taking her to court to force her to sell would see her turn my children against me, telling them I have made them homeless.

I know I can charge her half the rental value each month but again she would pass that onto the children in higher housekeep and blame me.

When the idea of signing my half of the property over to the kids came to me I felt relief. Until I looked into the cost.
When I told the ex she said she would happily sign her half over to them too.

I decided the cheapest option was to just remove my name and leave it to her to leave the house to them in a will. This is all very recent and now I realise CGT plays a big part I feel the best option is just to leave it as is.

The children know the house is effectively theirs and I know there is no way the ex would go against that.

So I do thank you all for your comments and help but for me this thread can now be closed.

If you don't come off this house you can't buy another without incurring the additional (now 5%) stamp duty which depending on the value could exceed £15k and you still have the capital gains bill further down the road, so it seems like a waste of money paying the stamp duty just to defer the capital gains, which is only going to increase. 

I would see if you can get your ex to pay all or some of it, because it's not a benefit to you, you are not making a gain but in fact she is. 

It might also be worth checking if there is a stamp duty bill to your ex for recieving your share of the property.