Avoid CGT by adding spouse to deeds?

Hi Malcolm

The short answer to your question is yes and it could save you a lot of money. They key to this is that you MUST be married (which you are) or in a Civil Partnership. Adding your kids for example would not work because that would trigger CGT on the transfer to them. Transfers between spouses are CGT exempt so it works. The tax man seems to like married landlords 

The transaction takes place on the day of completion of the sale. It is a relatively simple transaction but the paperwork and timing have to be spot on for it to work.

Do you have a good accountant who can work with your solicitor to sort this out for you?

If not I will be happy to introduce you to mine. He's based in Norwich but works for landlords throughout the UK - see >>> http://www.property118.com/member/?id=452
.

Wow. This bit of information could be so valuable as we sell of some of our lower performing properties or our current Rent Now Buy Later properties come to fruition.

I notice quite a few builders in my area, Cambridge, are now offering "shared ownership" purchase.
Whilst I think this is a trap for buyers, ie, if the property, and therefore their share, increases in value, the rest of the share is more out of reach than it was when they purchased the first share.

Anyway, that wasn't my question:
My question is:

Can I sell a share of a tenanted property to my tenants, eg. £10,000 each year, and avoid paying CGT.?
....At the same time, they can reduce their rent to me proportionally, and have "ownership" of the house they live in.

(or in the case or a couple, sell £20k per year)

Hello Mark,

Within your reply you say "Adding your kids for example would not work because that would trigger CGT on the transfer to them".

Isn't there a way to eliminate (or at least minimise) the CGT in adding children - perhaps by adding them at the same time as adding a spouse?

Thanks,
SmallFry

Reply to the comment left by "Small Fry" at "05/02/2014 - 15:51":

Not that I'm aware of, sorry.

If there is such a scheme though, this is a link to the man who will know all about it >>> http://www.property118.com/member/?id=452
.

Reply to the comment left by "Mark Alexander" at "05/02/2014 - 09:15":

Hi Mark
I added my wife as joint owner of a BTL property a few years ago. I bought the property for around £60K, when I added her to the deeds it was worth around £120K, it's now worth around £130K. If we sold it now do you know how we would would stand regarding CGT, or is this a situation I'd need a tax accountant for?

Peter

But if the property is mortgaged, it is harder to get the mortgage company to add your spouse to the mortgage these days AND the transaction triggers a stamp duty payment (whereas if the property is unencumbered, transfering 50% to spouse has no stamp duty charge. Don't know why this is but this was the case wen I did it.

Hi Mark

I have just contacted the recommended conveyancer from the list above reagrding adding spouse names to property at point of sale. Only to be told it cannot be done,
what was the legal practice refered to in one of your articles, as I cannot seem to locate the thread it was on.

Thanks

Reply to the comment left by "The Seasoned Female Investor" at "12/11/2014 - 14:04":

Which conveyancer did you speak to please?

It was my accountant that I linked to above, if that's who you called I'd like to know who you spoke to please.

I don't currently have a recommended conveyancer because mine retired and the person I helped to recruit to replace him has since moved on too. However, I am working on putting a special deal together for conveyancing for Property118 members so watch this space!
.

Reply to the comment left by "Mark Alexander" at "12/11/2014 - 15:48":

Hi Mark,

I have today spoken to Jill Weeler of Leathes Prior who has totally diismissed the idea, and cannot act in the sale of two properties on this basis