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  1. #1
    Join Date
    Jan 2011
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    Default Capital Gain Tax and Gifting a Share of a Property

    Hi

    I'm intending to re-mortgage one of my properties and as I don't have a 'proper' income but my other half does, I was thinking of gifting him 50% of the property. The equity I have in the property is about £60K.

    Does this mean I would have to pay capital gain tax as I've effectively given away about £30k.


    Many thanks.

  2. #2
    Join Date
    Dec 2012
    Location
    Isle of Wight
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    Default

    Not if you are married - gifts to your spouse are exempted. If an unmarried partner/anyone else then would have to pay CGT at market value on transfer. 3rd paragraph down on here: http://www.hmrc.gov.uk/cgt/intro/gif...it-divorce.htm
    caveat emptor
    If it sounds like I know what I am talking about........I don't.

  3. #3
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    Default

    Thanks, I shall put off remortgaging until after I get married in September :-)

  4. #4
    Join Date
    Dec 2012
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    Default

    Congratulations!

    However, just reread your post again and you should think about your income tax position before going through with it. As a married couple jointly owning you have to split the income either 50:50 or at the actual ownership share for income tax assessment. So if your partner is earning and you are not, then you could be paying more tax between you.

    Interestingly the position is not the same for jointly owning unmarried couples, they can elect any split for tax purposes they like. A point I got tripped up on a few threads down!

    You might be better achieving the same marital bliss by just changing your will to specifically benefit your new husband with the property should the worst happen.

    The time to transfer it into joint names is just before you sell - as it will halve your CGT liability.
    caveat emptor
    If it sounds like I know what I am talking about........I don't.

  5. #5
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    Jan 2011
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    Default

    Thank you :-)

    Really? So I could re-mortgage now and say, just gift him 20% and then would we still be able to take out a 'joint mortgage'.

  6. #6
    Join Date
    Dec 2012
    Location
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    Quote Originally Posted by Claymore View Post
    Thank you :-)

    Really? So I could re-mortgage now and say, just gift him 20% and then would we still be able to take out a 'joint mortgage'.
    Ah I see, I take it you really need your partners income to be able to get a mortgage or get decent terms. I'm not sure on this - i.e. the relationship between the mortgage and who owns the property. I know you usually cannot get a sole mortgage of a jointly held property but not sure if you can get a joint mortgage of a solely owned property. Worth asking a broker probably.

    Depending on the increase in value you might not be getting close to the CGT-free annual allowance anyway on transfer to joint names if you did it now, but cleaner if you wait until married (if joint names required for remortgage).
    caveat emptor
    If it sounds like I know what I am talking about........I don't.

  7. #7
    Join Date
    Jan 2011
    Posts
    1,429

    Default

    Increase in value is too much. I don't need the money now so I will just wait till after September. Many thanks for the advice.

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