Ex Family Home and CGT and income planning advice
1. 1999 - 5 bed house purchased solely in my husband's name in 1999 after which it becomes our primary family residence.
2. 2006 - We move to another property and this house becomes a rental property and has been so for the past four years.
3. Husband pays 50% tax and is now being taxed a lot every year as we make a very good income on the property.
4. We now want to try to minimise both the tax on existing rental income and ultimately on any CGT due when property is eventually sold. Because it was our primary residence we benefit from lettings relief etc but once this runs out we will be paying the higher 40% CGT on any gain.
5. Potential solution is to transfer full ownership of the house to me (which I believe is allowed from spouse to spouse) thereby ensuring that less income tax is paid annually as I currently have no income and any future CGT is taxed at the lower rate of 18%.
6. I believe that other than the actual land transfer process, my husband also requires a formal CGT valuation for HMRC so that he pays any CGT liable for the period of his ownership.
Is this a) the most effective way to minimise our tax situation b) could you please confirm the professional CGT valuation is required as I was told by a lawyer today that we didn't need one if the transfer was between spouses! I am now a bit confused when it had all seemed relatively simple before!
Thanks for your help!
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