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Answered in 33 minutes by:
7/6/2010
Sam, Accountant
Category: UK Tax
Satisfied Customers: 17,158
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
VerifiedHi Rick
The sale of the property will attract capital gains as a profit is being made from this build and sale.
You will pay 28% capital gains tax as you are a higher rate taxpayer, whereas your wifes share of her gain will be part at 18% and the remainder of 28% - so the first £37,400 in fact, as she has minimal income
Thanks
Sam
The sale of the property will attract capital gains as a profit is being made from this build and sale.
You will pay 28% capital gains tax as you are a higher rate taxpayer, whereas your wifes share of her gain will be part at 18% and the remainder of 28% - so the first £37,400 in fact, as she has minimal income
Thanks
Sam
Hi Rick
Thanks for your response
On the basis that you hope to realise a gain of £44,000 lets look at both scenarios (And I assume that legal costs to sell and estate agent fees have not been taken into account)
1) joint 50/50
Your gain £22,000 less £10,100 = £11,900 x 28% = £3332
Your wifes gain £22,000 less £10,100 = £11,900 x 18% = £2142
Total capital gain tax bill = £5474
2) Transferred into wifes name
Gain £44,000 less £10,100 = £33,900 x 18% = £6102
You can see the loss of your capital gain exemption allowance in fact makes the tax greater by transferring the whole of the property into her name - plus you would also incur legal costs to transfer the deeds - so leave it as 50/50
Thanks
Sam
Thanks for your response
On the basis that you hope to realise a gain of £44,000 lets look at both scenarios (And I assume that legal costs to sell and estate agent fees have not been taken into account)
1) joint 50/50
Your gain £22,000 less £10,100 = £11,900 x 28% = £3332
Your wifes gain £22,000 less £10,100 = £11,900 x 18% = £2142
Total capital gain tax bill = £5474
2) Transferred into wifes name
Gain £44,000 less £10,100 = £33,900 x 18% = £6102
You can see the loss of your capital gain exemption allowance in fact makes the tax greater by transferring the whole of the property into her name - plus you would also incur legal costs to transfer the deeds - so leave it as 50/50
Thanks
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 17,158
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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