Hello
I would be grateful if you could help me with this.
A client Mrs A owns a rental property on her own since 2001. When she comes to sell it she will be liable for any gains less her Capital Gains allowance.
If 6 months prior to selling the property she transfers 50% of it to her husband Mr A and then they sell it, are they able to split the entire gain since 2001 equally, or can Mr A only have 50% of the gain during the period of his ownership, being 6 months?
Any advice would be gratefully received.
Thanks
Replies (12)
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If she qualified for PPR
And then transferred half to hubby (when it was not their PPR), PPR would be lost on hubby's half on disposal.
Yes, such a maneouvre is effective for CGT.
This assumes that the wife is happy for the husband to keep 50% of the proceeds.
Yes
The point is that when W transfers to W it is deemed transferred for a consideration that gives rise to neither a gain nor a loss. W disposes of it for that consideration and H acquires it at that base cost.
So when W transfers her half to H she has made a disposal, but there is no gain, because the consideration is deemed to effectively be equal to her base cost.
On week later when H disposes of it his base cost is the amount that it was deemed transferred at, W's original base cost.
Any particular reason ...
... other than proving the gift was effective in good time (ie mot post excange)?it is sensible to have the gift and sale in different tax years if possible
Ramsey
To make it less likely that it will be identified as a transaction undertaken for tax reasons, if indeed the facts allow such an argument ( which they might if a client gets a bit too cute )