Capital Gains on Buy to Let

roadweary

I bought a property in 2007, carried out some major remodelling of the house, lived there for a couple of years, moved in with my partner (now wife) and let out the property.

About 18 months ago, I got a new buy to let mortgage, put my wife on the mortgage and changed the ownership to 99% in her favour as she is in the 20% tax band and I am in the 40% tax band.

I'm thinking forward to 5 years' time when I might potentially retire.  There would be 50k left on the mortgage.

If I sell, would the CGT be payable in the ratio of ownership, so 99% hers?

If so, would the CGT relief for the time that I lived there and the allowable costs for improvements to the house still be allowed?  The house was 100% in my name at the time.

Thanks.

Keep_pedalling

You are on the wrong board, I have asked for it to be moved to the’Cutting tax’ board. 

silvercar

I’ll move it to the tax board.

Jeremy535897

For income tax, rent from a house owned jointly between husband and wife is taxed 50:50, unless the ownership is not 50:50 (evidenced) and you file a Form 17. Have you done that?
For capital gains, your wife is treated as owning 99% of the property, her base cost is 99% of your base cost, including your improvements carried out before you changed ownership, and she is treated as if it were her main residence, for the purposes of main residence relief, from the date it became your main residence (which may include the remodelling period). See:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2024

roadweary

Jeremy535897 said:

For income tax, rent from a house owned jointly between husband and wife is taxed 50:50, unless the ownership is not 50:50 (evidenced) and you file a Form 17. Have you done that?
For capital gains, your wife is treated as owning 99% of the property, her base cost is 99% of your base cost, including your improvements carried out before you changed ownership, and she is treated as if it were her main residence, for the purposes of main residence relief, from the date it became your main residence (which may include the remodelling period). See:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2024

Thanks.  I remember submitting the info about change of ownership, land registry etc when I re-mortgaged, but I can't recall about the Form 17.  I can't see a way of checking this either which is concerning...

Bookworm105

roadweary said:

Thanks.  I remember submitting the info about change of ownership, land registry etc when I re-mortgaged, but I can't recall about the Form 17.  I can't see a way of checking this either which is concerning...

it would appear that confirming receipt of a Form 17 is a) by contacting HMRC directly and b) a lottery when (if) you get an answer

HMRC acknowledgement of Form 17 / Declaration of Trust receipt - Community Forum - GOV.UK