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.…

sherlock228

https://forums.moneysavingexpert.com/discussion/comment/82040264#Comment_82040264

when an asset is transferred between married couples the transferee receives the item at the original cost paid by the transferor (on whatever share they now own obviously). Tthe so called "no gain no loss" transfer.
"If the person receiving the asset later disposes of it, they will be treated as if they had paid an amount equal to the total of your costs."
HS281 Capital Gains Tax civil partners and spouses (2026) - GOV.UK

Being pedantic PRR is expressed as a % calculation done in months (or days), not years

The gain is the gain. Changes to ownership and claims to PRR (for a married couple) affect only how much tax each person pays on their respective share.
So, assuming 50/50 ownership and no other CGT liability that tax year (so full personal allowance remains for each), the position will be:

As stated in link in previous response, the gain calculation (for a married couple) itself is not impacted by the transfer, so:
Gross gain = sale 400k - original cost 37k - 13k "expenses" (incl both buying and selling fees), meaning:
His share 350 x 50% = 175k
Her share 350 x 50% = 175k

His net taxable gain 175 - (175 x 66% PRR being approx 20 years lived in / approx 30+ total years owned) = £58,333 less personal CGT allowance 3,000 = total net taxable gain £55,333

Her net taxable gain 175 - (175 x 66% PRR being approx 20 years lived in / approx 30+ total years owned) = £58,333 less personal CGT allowance 3,000 = total net taxable gain £55,333

Obviously the purpose of the exercise is to access her 3,000 personal allowance so your combined bill is slightly lower than were he to sell as 100% owner.
(if 100% owner then the net taxable gain would be 350 - (350 x 66.66%) - 3k allowance = 113k compared to the 110k total for joint)
If both persons are in the same income tax bracket then with a gain of that size the tax saving is 24% on £3,000 so £720. Hence it is worth considering the cost of fees in doing any transfer as you may not save any money anyway if the transfer fee is "expensive"

Where one person is a basic rate taxpayer and the other is not, that is when asset transfer can be made to be very tax efficient (and more cost effective) by having unequal ownership as more of the gain is exposed to the 18% lower tax rate.. Hence HMRC's attention to when and why the asset transfer was done.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82040240#Comment_82040240

If you are not bothered about saving a few hundred in tax for property 1, then no point arranging joint ownership if primary tax saving is mere utilisation of your wife's £3000 CGT exemption ( max tax saving of £720 at 24% via her allowance).

Nothing stopping you giving her 50% of the net proceeds thereafter and avoids her having to submit two tax returns for the transaction ( online CGT return within 60 days together with a more detailed SA 100 self assessment return thereafter).

You of course have these tax compliance obligations regardless, but if you can't do it yourself then only one set of professional fees to contend with rather than two. That said, I agree entirely with @sherlock's analysis of the more significant tax savings achievable if spouse is a zero or lower rate tax payer.

As for the house you are living in, it certainly make sense to change that to some form of joint ownership ASAP. Whether that be Joint Tenants or Tenants in Common, entirely depends on what kind of estate planning you want to implement via your respective wills.