Adding wife to property ownership

UKSBD

I owned a house before meeting wife. (house is in my name only)

We moved out when I bought a 2nd house (again, in my name only)

Current situation

House 1 - I owned before meeting wife, in my name only, we lived in for 20 years, then moved in to house 2 about 10 years ago, i let out original in my name only.

House 2 - I bought in my name 10 years ago, we live in this property

House 1 - £400,000 mortgage free

House 2 - £500,000 mortgage free.

Now looking at selling house 1 which will have a capital gain of approx £120,000

Can I now put ownership of house 1 in to both our names so when sold we receive £200k each rather than it all coming to me?

what is it legally called if I giver her 50% ownership of house 1?

UKSBD

Update to this -

I have been Googling and it looks like we should put House 1 in to "Joint Tenants" which we can get the solicitor we appoint for the sale to do before we put house on market.

Also make sense to get same solicitor to put house 2 as "Joint Tenants" at the same time.

Does that sound like the correct way of doing things?

Keep_pedalling

£120k taxable gain seems rather high considering you lived there for 2/3rd of the period of ownership, have you taking into account the available primary residence relief?

Are either of you higher rate tax payers?

sherlock228

FYI by transferring to wife now she will "inherit" your claim to PRR even though she did not live in it herself whilst simultaneously being an owner of it.
CG64925 - Private residence relief: ownership period: spouses or civil partners and legatees - HMRC internal manual - GOV.UK

If you intend to make the split 50/50 then Joint Tenants will achieve that.
If however one if you pays a higher rate of income tax than the other, you might want to investigate unequal shares as Tenants in Common.

Either way please be aware of the risk that HMRC may (low risk) say the transfer to her was done purely for tax purposes and therefore they have the power to ignore it and tax you as sole owner anyway. For example a transfer whilst the property is already being marketed for sale is a red flag.

UKSBD

https://forums.moneysavingexpert.com/discussion/comment/82038984#Comment_82038984

Yes, only paid £37k for it - the gain is about £350k but PRR knocks that down to closer to £120k

UKSBD

Thanks

Appreciate it may look like it is only being done for tax purposes, but in reality, we should have done it 20 years ago and it's really correcting something that should have been done.

I will investigate if unequal shares is worth doing, but in reality we're not that bothered about saving a few hundred/low thousands, just want things set up correct.

UKSBD

"FYI by transferring to wife now she will "inherit" your claim to PRR even though she did not live in it herself whilst simultaneously being an owner of it."

Does that mean we split the PRR equally and submit on each others tax returns.

ie.

If it is just in my name I get the full £230k PRR, if it is "Joint Tenants" we both get £115k?

UKSBD

Also, as it was only me who initially purchased and paid out expenses, would that mean her gain would be greater than mine?

Ie

assuming joint tenants, sale price of £400k, (ignoring any other costs for this example) we both get £200k

My calculation would be £200k -£37k original purchase price -£13k expenses -£115k PRR = £35k capital gain.

Wife's calculation would be £200k - £115k PRR = £85K capital gain

theartfullodger

Obviously relationships never go wrong.

Artful, now on 3rd marriage.…