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Capitol gains
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tony6159
Posts: 3 Newbie

Hi,
My now wife purchased a home in 2004 for £80,000, when we got married in 2006 I moved in and was added to the deeds. In 2007 we bought another house which we moved into as our primary residence.
We rented out property one and have recently sold it so are liable for CGT.
Questions.
As the market valve was almost twice as high when I moved in 2006 can I use half of the market value price for my share of purchase price when filling out the capital gain form?.
Also does my wife have to use £40,000 which is half the purchase price or can she also use market value.
Market value would benefit as alot when paying the gain.
Thanks in advance.
Tony.
My now wife purchased a home in 2004 for £80,000, when we got married in 2006 I moved in and was added to the deeds. In 2007 we bought another house which we moved into as our primary residence.
We rented out property one and have recently sold it so are liable for CGT.
Questions.
As the market valve was almost twice as high when I moved in 2006 can I use half of the market value price for my share of purchase price when filling out the capital gain form?.
Also does my wife have to use £40,000 which is half the purchase price or can she also use market value.
Market value would benefit as alot when paying the gain.
Thanks in advance.
Tony.
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Comments
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Both your gains will be based on the original purchase price. The transfer to you from your spouse is deemed to be at the original price, so all you gain is the additional CGT allowance.0
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Thanks for your reply.
As my wife put me on the mortgage/deeds and no money exchanged hands although we still had a mortgage. is this not classified as a "GIFT" and therefor can I not use half the market value at the time of the gift when entering for my share for capitol gains and if this is the case does my wife enter £40000 'half purchase price'.
She will also be able to use PRR while we lived in the house until we moved out.
Sorry for the questions.
Tony.0 -
Have a look on the tax board for similar discussions on this topic.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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tony6159 said:Thanks for your reply.
As my wife put me on the mortgage/deeds and no money exchanged hands although we still had a mortgage. is this not classified as a "GIFT" and therefor can I not use half the market value at the time of the gift when entering for my share for capitol gains and if this is the case does my wife enter £40000 'half purchase price'.
She will also be able to use PRR while we lived in the house until we moved out.
Sorry for the questions.
Tony.
If you and your spouse or civil partner are living together, any transfer of an asset between you is treated as giving rise to neither a gain nor a loss to the person transferring it. Any amount actually paid is ignored. If the person receiving the asset later disposes of it, they will be treated as if they had paid an amount equal to the total of your costs.
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
So each of you will be basing your gain on 50% of the original purchase price. You can both claim PPR for the time you lived they and purchase and selling costs can be deducted from your gains.0 -
tony6159 said:Thanks for your reply.
As my wife put me on the mortgage/deeds and no money exchanged hands although we still had a mortgage. is this not classified as a "GIFT" and therefor can I not use half the market value at the time of the gift when entering for my share for capitol gains and if this is the case does my wife enter £40000 'half purchase price'.
She will also be able to use PRR while we lived in the house until we moved out.
Sorry for the questions.
Tony.
property transfers between spouses are at a no gain, no loss basis and result in the person receiving the gift doing so at the original purchase price paid by the donor.
Given the transfer meets the pre April 2020 condition (the property was your marital main home at the date of transfer), you are also entitled to claim private residence relief (PRR) backdated to the date of her original purchase since it was her main home from the date she bought it even though you were neither married to her or living in it yourself in 2004..
CG64925 - Private residence relief: ownership period: spouses or civil partners and legatees - HMRC internal manual - GOV.UK
so, assuming 50/50 ownership you have a purchase cost of 40,000 and she has a purchase cost of 40,000 when working out the gain on your respective half shares
you will each be able to claim PPR for the period , measured in months, not years, between purchase date in 2004 and the date it ceased to be your main home in 2007. You can also add the "final" 9 months to that claim period even though no longer living there.
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Capitol gains were surely what those thuggish criminal rioters were after...
https://en.wikipedia.org/wiki/January_6_United_States_Capitol_attack0 -
tony6159 said:Thanks for your reply.
As my wife put me on the mortgage/deeds and no money exchanged hands although we still had a mortgage. is this not classified as a "GIFT" and therefor can I not use half the market value at the time of the gift when entering for my share for capitol gains.
The gain is treated as linear since 2004 to minimise the need for assessing market value when there's no real transaction, so you'd both get PPR for the months between 2004 and 2007 plus the last 9 months, with a starting price of 40k each.0 -
Thanks for your replies, I am alot clearer now as to what I have to do.
Tony.
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