Capital gains tax payable on transfer of property from husband to wife

NazFinancialNazFinancial Registered, MAAT Posts: 4
edited October 2017 in Tax
Hi Everyone

I've been a member with the AAT for a good number of years but this my first post on the forum so I hope it will be received warmly by you all!

I have the following question:

An individual has a buy-to-let property in their name and would like to transfer some of the beneficial interest (possibly half of it) to his wife. Will there be any capital gains tax payable?

My understanding was that transfers between spouses is completely exempt from CGT but does this also include when the property is finally sold.

Also will his wife be required to submit tax returns now as it would be implied that she is receiving rental income which will be taxable through self-assess.


Your thoughts would be much appreciated and apologies if I've posted in the wrong place.



Answers

  • NazFinancialNazFinancial Registered, MAAT Posts: 4
    yes but unfortunately it went into the wrong section.

    AAT have just updated my status to full member so I can post here.

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,436
    You are correct that the transfer between H & W is at no gain no loss for CGT. The wife's base cost for future disposal will be half of the base cost of the property (assuming a 50/50 split).
    She will have to declare the rental income on her SA although depending on the level on income she could call HMRC for exemption.
  • NazFinancialNazFinancial Registered, MAAT Posts: 4
    Hi, thank you for the responses. Just made a quick call to HMRC and they confirmed if annual rental income is below £10k gross (£2.5K net) she wouldn't have to declare the income through self assess.

    Mick- are you able to confirm some of the of legal aspects?
    mskaat
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