Capital Gains - Transfer of Deed?

SarahS

Hi

I have a married couple as clients. The wife has a property which rents out which is in her sole name. They would like to know, that as they plan to market the property soon, if they can transfer the deed of ownership to both of their names. The reason they want to do this as his wife will pay CGT of around £2K on his figures. If in both of their names it will lessen the CGT burden to practically nil by all accounts.

I'm cautious that this could be seen as tax avoidance?

Any thoughts?

slackda

not my specialty but if i rember correctly my parents were looking to transfer deeds of my house to me, as they are part owners, but i think we were advised against it as it come under the similar tax implications similar to gifting, i.e you can gift i think it is 3K a year to family members with no tax implications... but like i said im no expert in this field...im sure we have some ATT studiers on the forums though.

deanshepherd

No problem. Husband and wife transfers are nil gain nil loss for CGT and exempt for IHT.

There may be a practical issue depending how co-operative their mortgage company is and also legal costs involved but if it saves £2k in tax then it is probably worth it.

SarahS

Thanks Slacka and Thanks Dean for sharing your expert knowledge!

Hmm with regard to mortgage company they didn't particularly want to bother changing to names on the mortgage but it seems to me that the deeds shouldn't be changed without the mortgage being change too.

Sarah

deanshepherd

The mortgage company probably has the deeds in their possession!