Capital gains tax when property jointly owned husband/wife then only wife

Hello. I would appreciate some advice. My husband and I jointly bought a house in the UK in 1985. In 1997 we transferred the ownership into my sole name as the house was to be rented out and I was a lower rate taxpayer than my husband. We lived in the house on and off between 1985 and 2013, when we moved permanently to Spain (my husband was in the UK Armed Forces so we moved around a lot). We have original 1985 purchase documents (in joint names) and the Land Registry document from 1997 which states my sole ownership from June 1997 to now. My husband and I are still married and since 2013 we have lived in Spain full time. The UK house is now up for sale. Upon a successful sale of the property, my questions are: 1. Should my husband and I both complete a Capital Gains tax declaration, or only me? 2. On the CGT calculation webpage it asks for the date of purchase of the property. I assume that would be 1985? But I only paid 50% of the property purchase cost in 1985 (the funds came from our joint bank account but I suppose that is a nominal 50% each). I can't put 1997 as the purchase date because no money transferred hands - it was a straightforward transfer between husband and wife and there was no Capital Gains tax to pay at that time. Any help gratefully received. Thank you.

Hi,
 

"You have a choice as husband and wife, to split the gain 50/50 or for you to declare the gain as the beneficial owner.  If you choose to split the gain 50/50, you will both need to declare your 50% of the gain . There is a calculator at : Work out tax relief when you sell your home , to help you work out the gain  .  If you split the gain, both of you will need to perform separate calculations .  You may be entitled to private residence relief and you can find guidance at : Tax when you sell your home  .  Please note that if a gain arises, you have 60 days to report and pay any tax due, to avoid penalties and interest charges." Thank you.

I would like further confirmation that although a second property is in a sole name: in my husband and my case, it's in his name, we can sell it and choose to split the gain 50/50. We are being told by an accountant that before the sale of the property takes place we will have to have a deed of trust drawn up. The response I have just read does not imply this is necessary as husband and wife. Am I correct in this understanding?

Hi,

Where your husband is the sole owner of the asset at the time of disposal, he must bear the brunt of any capital gains liability from the disposal, alone.  

The property will need to be held in joint names, for a 50/50 split to be allowed.  

There is no Capital Gains Tax liability arising from the transfer of assets between spouses and civil partners.

Thank you.

Can I ask, where two people are not married but they are registered as joint owners how does CGT work in this case? Particularly where ownership is not 50/50? Is CGT allowance proportional to the ownership percentage or can they too declare 50/50 split? Thanks

Hi Richard,
It is split per the ownership of the property - Joint property ownership.
Thank you.

We have a complex one regarding prime property allowance for my wife’s previous home, and the calculation of prime residence relief. 1. My wife owned a flat as her prime property. She counts prime residence days. 2. We got married and she lived in my flat. As we are married we can only have one prime residence between us, and we are using my flat. She does not count prime residence. 3. A bit later we split ownership in her flat 50/50. Neither of us count prime residence days 3. After my redundancy we start flex working and move out of my flat into my wife’s cheaper flat. We both count prime residence days 4. We move out of her flat, and rent it out. We get the last 9 months as prime residence, but before that neither of us count prime residence days. Question is how do we calculate my prime residence days. E.g. Do we each count a different ownership and prime residence period, my wife from acquisition, me from the 50/50 split?

So just to be sure, on a second home jointly owned by a husband and wife, to make the capital gains tax calculations you would need to divide everything by two - including the cost of the property, its selling price and all the associated costs involved in the transaction. Only by halving all those costs can an accurate calculation be arrived at and entered separately for each person?

Hi Mike Bennett,
You can see guidance here:
CG64485 - Private residence relief: only or main residence: two or more residences: right of nomination
Thank you.

Dear to whom this may concern. I just have a capital gains tax question with regards to a property my sister sold recently but I was down as joint owner. Back in 2008 my sister needed help getting a mortgage so I agreed to help her get her flat by putting my name down as joint owner despite the fact she paid the mortgage on her own and later in 2017 letted the property out (again without me receiving any gain.) My sister has now sold the property recently and her solicitor requested I sign a declaration that she would be sole beneficiary of the sale of which I signed and my sister received all proceeds from the sale. My sister just filed the sale with HMRC online and received her capital gains tax calculation and has paid it, however do I still need to do anything despite she filed the CGT in her name and was sole beneficiary of the sale? I'd be most grateful for an update as I don't wish to miss any possible deadline and if I do need to submit anything would it be as £0.00? Thank you

Hi Fellwalker,
Yes, that is correct.
Thank you.

Hi. I purchased a property in 2007 that I lived in for a few more years until I moved and rented the property out. I got married last year. Do I need to add my husband to the title deeds in order to split the CGT 50/50 or can it simply be sold and split between us without the change? If a form is required could you direct me to the appropriate form please? Janine

Hi, If a property is jointly owned between husband and wife (husband pays HRT, wife pays BRT) and the property is moved to sole ownership of the wife then no CGT applies. If it’s then sold in the same tax year is the CGT still solely attributed to the wife? Thank you

Hi Tonyv,
As you have now signed the declaration that she is the beneficial owner of the income from the sale, you have no Capital Gains Tax to report.
However, as this is after the rental income, this should have been declared on a 50/50 split as no declaration was submitted.
Thank you.

Hi ,
 

You can either split the disposal of the property as 50/50, since you are married at the time of the disposal or declare 100% to you as the legal and beneficial owner. Thank you .

Hi,
Yes, it will be.
Thank you.

Related to this, my husband purchased 35% if a shared ownership property in 2008. I moved into the property in 2009 after we got married. We staircased to 100% ownership in 2012 in both our names. We then moved out of the property and rented it out to tenants for a few years. The property is currently being sold. Do I qualify for private residential relief from the date I moved into the property in 2009, although I was not named on the mortgage at that time?

Hello My soon to be ex-husband owns a property overseas. I do not own a share of this property. If sold the property would have a loss for CGT purposes and we are getting divorced. Would I be able to use those losses to offset gains I might have from the proceeds of a UK sale?

Thank you for a very helpful reply. Just two further questions. Firstly, can I pay the CGT due on selling a second home through my HMRC Government Gateway log-in, so that the payment is secure. Secondly, do I still have to complete a tax return form at the end of the year, even though the CGT payment has been made? Thanks again.

Hi Ang8,
If you met the conditions of it being your only residence, then yes.
Thank you