Capital Gains tax

Brightygal123

Hi,
I am about to sell a buy to let property owned solely in my name.  I believe that I may be able to reduce my capital gains tax burden if I gift (some? half? all?) of the property to my husband.  Could somebody please explain a little more to me about this?  Many thanks in advance :-)

Keep_pedalling

Well you would get two annual allowances instead of one but as the allowance is now only £3000 so probably not worth it. If you are a standard rate tax payer and your husband is a higher rate payer it could actually cost you more.

Bookworm105

as you are married you are permitted to make a "no gain, no loss" gift between spouses.
That would mean he acquires your gifted share at your original cost.

has the property only ever been a BTL? If it was once your main home and thus you are able to claim some Private residence relief against your share of the gain. Your claim to PRR would also transfer to husband even if he never lived in that property himself either before or after your marriage. 

so in simple terms, if you gift half the property then half the gain (and any relief thereon) is now in his name.

take heed of keep_pedalling 's warnings re the cost effectiveness of having to pay for the legal ownership transfer when set against potential tax savings and/or respective tax brackets..

saajan_12

Brightygal123 said:

Hi,
I am about to sell a buy to let property owned solely in my name.  I believe that I may be able to reduce my capital gains tax burden if I gift (some? half? all?) of the property to my husband.  Could somebody please explain a little more to me about this?  Many thanks in advance :-)

The short answer is it means you get an extra £3k allowance. However whether it makes sense in your case will depend on the answers to the below:
- whats your & your husband's income tax bands
- do you / he have other capital gains this year (eg if you've sold other stocks & shares this tax year)
- how much do you expect to gain on the sale price of the property