Property gift to wife

Property gift to wife

Didn't find your answer?

I own a small commercial property which I am about to gift to my wife in order to shelter the income from my 40% tax band. My solicitor has suggested that I retain a 1% share and gift 99% to my wife. He's a bit vague about the detailed reasons for this, just that it's his standard advice. I will be asking him to spell this out but I wondered what the views of the AWeb community were on the pros and cons of this.

Cheers, Neil
Neil Eglintine

Replies (7)

Please login or register to join the discussion.

avatar
By wdr
01st Feb 2007 16:34

The only time when an SDLT issue can arise is if there is a mort
The Stamp Office are of the view that assumption by the donee of the mortgage liabilty is part payment, and so stampable.

Thanks (0)
avatar
By neileg
01st Feb 2007 15:29

Ah, thank you
Yes. I understand the second CGT allowance and the control over disposal issues. I hadn't considered the settlement trap.

As far as SDLT is concerned, I had assumed that the gift of 99% would be exempt, as would the outright gift. Have I misunderstood?

Thanks (0)
avatar
By Mr_Flibble
01st Feb 2007 14:36

Or indeed, perhaps
Ignoring the tax side of things, I would guess it means that your wife would be unable to easily sell the property without your permission/cooperation , so in the unfortunate instance that you were to have a falling out, she couldn't sell the building from under you, which she could if she held 100% of it.

Thanks (0)
avatar
By wdr
01st Feb 2007 14:44

What your solicitor may have in his mind is that you may want to
If the property is jointly held, then you can chose to rely on a default 50;50 allocation of income under ICTA s282A, or insist on a prorata allocation under ICT s282B.

There can be problems if the Revenue argue that s282A is disapplied under 282A(5) by virtue of the notorious 'settlement' provisions of ITTOIA s625 .

Having regard to these draconian provisions I would go for an outright gift to your spouse, which will be free from SDLT as well.

I assume that your wife is not non domiciled in the UK in circumstances where you are UK domiciled, as the gift would then be subject to IHT, albeit as a Potentially exempt transfer.

Thanks (0)
avatar
By User deleted
01st Feb 2007 13:13

Perhaps it's because..
if the property is sold/transferred at sometime then you can utilize your CGT annual allowance.

Thanks (0)
avatar
By carnmores
04th Feb 2007 14:52

in summary it appears
SDLT only if mortgage
IHT age important PET
CGT as discussed
IT definitely a settlement issue, await HOL Artic decision July

why not sell it to her on very easy terms (check SDLT)

Thanks (0)
avatar
By neileg
05th Feb 2007 09:30

Thanks
I think I'll make it an outright gift. Seems to be the most straight forward.

Thanks (0)