Reducing Capital Gains Tax on Selling a Rental Property

WendyTony

My husband is on the deeds of our rental house, which we are thinking of selling this year.  To reduce the capital gains tax on the sale, we think we should add me to the deeds.  To do this do we just add myself to the registration at the Land Registry or do we need to add my name to the deeds?  We can do the change at the Land Registry ourselves but would need a solicitor/conveyancer to change the deeds. 

Olinda99

why do you think this will reduce cgt ?

Sam_666

Is property with mortgage? That could limit you option of adding you to deeds.
Due to shortcoming on details, I have to guess this idea is to pay less tax on your share, as you are basic rate payer.
What gives you idea that you can change anything with Land Registry without solicitor?

_Penny_Dreadful

Sam_666 said:

Is property with mortgage? That could limit you option of adding you to deeds.
Due to shortcoming on details, I have to guess this idea is to pay less tax on your share, as you are basic rate payer.
What gives you idea that you can change anything with Land Registry without solicitor?

If there’s no mortgage then it’s straightforward to DIY a change of ownership between spouses with the Land Registry. 

Olinda99

you can't retrospectively do it ie say oh all.these years past it was really both of us on the deeds. You can do it going forward of course. You don't need a solicitor.

WendyTony

Thanks for comments.  
My understanding is that we will both have our 18% allowance of cgt if we are both owners and we are both basic tax payers.  As it will be a transfer to a spouse cat will be paid from when the property was bought, which won't be a great saving but could still be £4k.  I'm looking at whether it is worth the effort.  
There is no mortgage, so should be straightforward, but is it just a case of change the ownership with the Land Registry?  
I'm confused as to where the deeds come into the process. 

Bookworm105

WendyTony said:

Thanks for comments.  
My understanding is that we will both have our 18% allowance of cgt if we are both owners and we are both basic tax payers.  As it will be a transfer to a spouse cat will be paid from when the property was bought, which won't be a great saving but could still be £4k.  I'm looking at whether it is worth the effort.  
There is no mortgage, so should be straightforward, but is it just a case of change the ownership with the Land Registry?  
I'm confused as to where the deeds come into the process. 

a) have either of you ever lived in the property as their main home and b) was that before the marriage?

Please understand that just because you pay basic rate income tax does NOT mean all of the gain will be taxed at 18%
you are correct that having 2 owners does mean the bill is obviously split between you and therefore each of you will have a certain amount of it exposed to 18% and possibility a certain amount of it exposed to 24% depending on how big the bill is.

anselld

WendyTony said:

I'm confused as to where the deeds come into the process. 

These days “the deeds” and Land Registry are one and the same.

Olinda99

your husband was the sole owner from when he bought it. He is liable for the cgt on any gain from then until now

If tomorrow you go 'on the deeds', ie you own it jointly, then any gain from tomorrow onwards will be split between you.

anselld

Olinda99 said:

your husband was the sole owner from when he bought it. He is liable for the cgt on any gain from then until now

If tomorrow you go 'on the deeds', ie you own it jointly, then any gain from tomorrow onwards will be split between you.

That is incorrect.  No CGT arises on Spouse Transfer and the transferee receives the asset at the base cost of the transferor.  It it therefore as if both had shared ownership from day one (at least as far as CGT is concerned).

AlexMac

anselld is, I think, correct. We did this. I’d owned a BTL in my sole name for 20 years or so, pre-dating our marriage. When we were buying another, later property together, we just asked the solicitor to tidy things up by transferring the BTL into both names. No hassle, no tax. In fact, I assume we could have done the transfer without a lawyer, but why keep a dog….