Capital Gains Tax on house sale

MrsPorridge

DH has owned half a house for the last 35-40years.  He last lived in the house in 1993.  He has had no income from the house during this time.  The house is going to be sold in the near future.  As the house is in London it has risen considerably in value.  Is there any way he can offset his CGT onto me - I am a non tax payer.

Just sounding out some opinions.  Is it worth engaging a specialist?  Just wondering if the cost of engaging a tax solicitor would outweigh the amount of tax he has to pay?

It is anticipated the house will go up for sale within the next 6 months.

If it makes any difference we own our own home mortgage free.

Bookworm105

he will be facing a very big CGT bill so yes the cost of professional advice would be a far smaller than that

did he own it before 31 March 1982?

his gain will be the difference in value between date of acquisition (by inheritance?, by purchase?) and what he sells it for 
he can deduct certain costs from that such as legal fees for purchase and sale, estate agent fee on sale, (fees incurred in getting a professional value if needed). He can also deduct his £3,000 CGT allowance. That will leave a net taxable gain.

he needs to work out (in months or days, but not years) the time he lived there as his main/only home: presumably acquisition date to a date in 1993? That time divided by his total ownership time will give a % called private residence relief

that % is how much of the net taxable gain that is "relieved" ie is not taxable, the rest is taxable. If he is already a higher rate taxpayer then all of it will be taxed at 24%.
If he is a basic rate taxpayer then you deduct his gross income before income tax from 50,270 and that is how much of the gain is taxed at 18%, the rest will be at 24%

as it appears you are married then making you a co-owner will allow the gain to be split between you in whatever shares you each decide to own and you get to use your own £3k allowance against your share.
I assume you are still living together in a property, therefore, as the transfer takes place after 2020 there is a rule that means not only does your ownership start from the date he first got it, but also you acquire the same % PRR as he does, even if you have never lived in the property yourself or were not even married to him pre 1993.

for the £ sums involved don't look for free DIY, pay a tax professional, ie accountant because the tax has to be declared and paid within 60 days of the date of sale or penalties will arise.

silvercar

You need a (tax) accountant rather than a solicitor 

MrsPorridge

Thank you so much for the advice @Bookworm105

He did not own in before 1982.  Probably around 1987 ish.

We will seek professional advice.

sheramber

Presumably it would need the agreement of the  owner/s of the other half off the property to transfer a part share to you?