Can I put it in wife's name to reduce/avoid tax?

[mcjthomas]

Hi i have 2 properties my residential and my 2nd property i rent out.

the situation is i built a property 4 years ago for approx 85k I have got alot of my debt from my divorce and costs from buying my new home and my mortgage is currently 185k on this property.

I also have about 35 k in credit cards costing me £800 a month and we are now just about coping every month.

I decided to sell my second property which is valued at 235k but will probably get about 230k.

my intention was to pay as many of my credit cards off that i can, i was working on the basis that they would look at my mortgage of 185k and and work the tax out on ths after speaking to the tax people yesterday they will take the value of the property for the cost it was built , so all in all they have informed me I could be looking at a 60k tax bill.

I would rather struggle by and than pay 60k tax which i cant afford anyway.

My new wife has no mortgage or ties and everything is in my name is there anyway of transferring it out of my name or anyway i can reduce the tax on this property.

ultimately I will have no alternative but to sell my residential property and live there myself otherwise which is just not ideal as it is next door to my ex wife and just a nigtmare, i just cant afford 60 k tax:(

thanks for reading and help is much appreciated.

[jeffrey]

Hi i have 2 properties my residential and my 2nd property i rent out.

the situation is i built a property 4 years ago for approx 85k I have got alot of my debt from my divorce and costs from buying my new home and my mortgage is currently 185k on this property.

I also have about 35 k in credit cards costing me £800 a month and we are now just about coping every month.

I decided to sell my second property which is valued at 235k but will probably get about 230k.

my intention was to pay as many of my credit cards off that i can, i was working on the basis that they would look at my mortgage of 185k and and work the tax out on ths after speaking to the tax people yesterday they will take the value of the property for the cost it was built , so all in all they have informed me I could be looking at a 60k tax bill.

I would rather struggle by and than pay 60k tax which i cant afford anyway.

My new wife has no mortgage or ties and everything is in my name is there anyway of transferring it out of my name or anyway i can reduce the tax on this property.

ultimately I will have no alternative but to sell my residential property and live there myself otherwise which is just not ideal as it is next door to my ex wife and just a nigtmare, i just cant afford 60 k tax:(

thanks for reading and help is much appreciated.

Did your wife contribute to purchase price, improvements, or routine domestic running costs/expenses?

[mcjthomas]

hi ,no i built this property before I even new her

[stephenp]

have you ever lived in the property that you built?

[mcjthomas]

i did when i split up from my first wife but only for about 10 months but i have no evidence as i continued to pay the council tax on my marital home

[Tax Accountant]

Hi I have my residential property.

I also have a second property which I built 4 years ago for approx 85k.

I lived in this second property when i split up from my first wife but only for about 10 months but i have no evidence as i continued to pay the council tax on my marital home.

The second property has been let out since I moved into my new home.

I decided to sell my second property which is valued at 235k but will probably get about 230k.


I have edited the query so as to show the position as I see it.

If you separated from your 1st wife in circumstances likely to make the separation permanent, and moved into the 2nd property next door, this 2nd property is considered to be your only or main residence.

On this basis, you may be exempted from Capital Gains Tax on this 2nd property for the 10 months you used it as your residence plus the final 3 years of ownership.

Additionally, there is also the lettings relief, taper relief and CGT annual allowance.

It seems that you may not have to pay any CGT on the gain.

However, you are advised to seek professional advice to make sure that all relevant points are properly addressed, ie, your 1st marriage, building 2nd property next door, separation from your 1st wife, moving in the newly built property next door, divorce from 1st wife, buying a new house, letting out the previous property etc.

Ramnik

[mcjthomas]

Thank you for helping me there

Having read your email we are digging out all the paperwork and can demonstrate the criteria you have advised, my only concern is that how do i proove i lived there for 10 months - to save money i lived in 1 room and rented out another room like a houseshare I've reduced the rent and the couple paid the utility bills, the only proof i have is my divorce paper which was served in 2005 and 2 years prior to that we've seperated (will this be concrete enough)? I've not changed address as my ex-wife lived next door and everything was very amicable and it was convenient not to change address, because i knew that i would only live there short term.

Anyway i will seek advise as suggested ,if anyone has any recommendations of someone I could use professionally it would be gratefully accepted.

Ramnik thank you for your help and advice it is very much appreciated.

[Tax Accountant]

Thank you for helping me there

Having read your email we are digging out all the paperwork and can demonstrate the criteria you have advised, my only concern is that how do i proove i lived there for 10 months - to save money i lived in 1 room and rented out another room like a houseshare I've reduced the rent and the couple paid the utility bills, the only proof i have is my divorce paper which was served in 2005 and 2 years prior to that we've seperated (will this be concrete enough)? I've not changed address as my ex-wife lived next door and everything was very amicable and it was convenient not to change address, because i knew that i would only live there short term.

Anyway i will seek advise as suggested ,if anyone has any recommendations of someone I could use professionally it would be gratefully accepted.

Ramnik thank you for your help and advice it is very much appreciated.

When did you separate from your ex-wife?

What were the divorce arrangements regarding the properties?

Whose name was the 1st property in? Did this change? When?

Why did you build the 2nd property next door? When was this built?

Whose name was this property in? Did this change? when?

When did you start letting the property next door?

Did you declare the rental profits to the tax office?

Have the tenants changed since first letting?

When did you move into the property next door? When did you move out?

When did you buy the 3rd property?

Is this in your name only?

When did you move into the 3rd property?

[Tax Accountant]

I think this has now appeared in a separate thread by CHAZY.

DO NOT POST SEPARATE THREADS REGARDING THE SAME QUERY.

Ramnik