Joint ownership into daughters sole name to escape CGT?

by Readers Question

15:05 PM, 6th April 2016
About 3 years ago

Joint ownership into daughters sole name to escape CGT?

Make Text Bigger
Joint ownership into daughters sole name to escape CGT?

Myself, my wife and my daughter are all joint owners of a flat. I want to sell it and, if we can, avoid any CGT.CGT

Here is what I’m thinking, please comment.

I want to make my daughter the single owner, pay off the BTL mortgage then my daughter will the sole resident of a non BTL property…. I hope!

If she then sells it, is there any tax liability on the profit for any of us? Does this, if acceptable, need to happen over a specific time frame?

Many thanks
Simon



Comments

Mark Alexander

15:13 PM, 6th April 2016
About 3 years ago

Hi Simon

The CGT would be incurred at the point of transfer from yourself and your wife to your daughter.

Even if you gift the property or sell it to her for £1 the same level of CGT will be due as transfers of this nature are assessed at market value when they occur at below market value or gifts.

I'm sorry that's not the answer you would have wanted to but if it was that easy to avoid tax the Government would never get any.
.

Simon Rothery

16:15 PM, 6th April 2016
About 3 years ago

Reply to the comment left by "Mark Alexander" at "06/04/2016 - 15:13":

Thanks Mark, pretty much what I guessed...but hoped otherwise!
Is there any other method? I.E. Pay off the mortgage first, as I see it that is the tie to being btl and once paid off it ceases to be btl....or is that not really relevant? Very open to any suggestion that could be of benefit.
Thanks
Simon

Neil Patterson

16:22 PM, 6th April 2016
About 3 years ago

Hi Simon,

Please see our CGT page under the Tax tab and things will become clearer >> http://www.property118.com/capital-gains-tax-relief-on-a-property-you-have-lived-in/

Mark Alexander

16:25 PM, 6th April 2016
About 3 years ago

Reply to the comment left by "Simon Rothery" at "06/04/2016 - 16:15":

Hi Simon

How much gain have you made?

Remember, you each have an annual CGT allowance which can be used up.

Have you ever lived in the property? If so that will help. see Neil's comment above and follow the link he's provided.
.

Simon Rothery

16:34 PM, 6th April 2016
About 3 years ago

Reply to the comment left by "Mark Alexander" at "06/04/2016 - 16:25":

Mark, the buy price was 240k, the current market value is approx 370k. We three named owners have never lived there, however, my son of same surname obviously, did live there for a year but I guess that wouldn't be relevant either.
I just read Neil's link, very interesting, thanks. I need to understand the relief side better, but fundamentally the three pay same basic rate tax. Can you please give a quide to the total relief possible and what I need to do to acheive that.
Many thanks

Mark Alexander

16:41 PM, 6th April 2016
About 3 years ago

Reply to the comment left by "Simon Rothery" at "06/04/2016 - 16:34":

Hi Simin

I recommend you seek professional advice as there will be other things you can use to offset the gain such as agents fees, SDLT paid at purchase and more.

Your tax calculation will be far too comprehensive for a forum discussion.

Please see our tax section and in particular the form at the bottom of that page which you can complete to be referred to my accountants.
.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

And the landlord vote goes to - ?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More