SDLT on beneficial transfer to spouse – No mortgage – Want To Utilise Both CGT Annual Exemption Allowances on SaleMake Text Bigger
I’ve been looking at whats been said on this already and I’m a bit confused. Let me describe my scenario.
My wife has a property, gifted to her in her name, bought a couple of years ago for £285k. She now wants to sell. Its value is £320k. We have other rental properties owned jointly and are both higher rate taxpayers. Neither of us have used our CGT allowance.
There is no mortgage. The property is in her sole name. If she sold it outright, the gain would be £35k – the CGT allowance of £11.5k = £23.5K total gain on which she would pay 28% CGT as I understand it, which equates to £6.58k
Here’s the question: Could she transfer, for example, by benefical gift, half of the property to me (value of £160k). My understanding is that there is no CGT on transfer between spouses.
However is there any SDLT to pay. One article I have just been reading on this forum says there is no SDLT to pay. Another article seems to suggest there is (due to transfer of assets, by gift or whatever).
Would this be the best way of doing it, we are in the process of selling the property now, so we were thinking of beneficial transfer of 50% of the value to me (of course – no mortgage on the property): hence
Property therefore now in joint names, Total gain as before, being £35k – 2 CGT allowance (£23k) = joint gain now of £12k. Hence CGT payable by each of us is 28% of this which is £3.36k each.
In addition I have some EIS investments which would allow me to defer the £3.36k payable for3 years anyway.
The question, here is, do we have SDLT to pay and if so would it be better to
1) Dispose of the property in my wife’s name and leave things as they are and pay the CGT or
2) Transfer via gift 50% of the property value to me and carry on this other route. It all depends on whether there is SDLT to pay on the transfer to me and whether this is more than the CGT payable in 1)
My confusion is about the SDLT – whether this is payable or not.
Thanks for any replies.
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