Capital gains
Written by Ray Coman
Capital gains tax (CGT) is due on any increase in value of an asset from the time of acquisition to the time of disposal. A person resident in the UK is charged to CGT on worldwide assets.
Capital gains are taxable after deduction of the individual's annual allowance, and any capital losses brought forward. Tax is applied to the gain at a rate of 18% to the extent that it falls within the taxpayer's basic rate band, and 28% thereafter.
Consequently, there could be a tax advantage to disposing of a property in a year in which a person's UK income is lower.
Comments
You cannot chose to disclaim the spousal exemption, however you could time or plan your disposal so that the base cost is increased for capital gains tax purposes. For instance, if you were still living together, your husband could transfer property to another family member, such as any children, and your child could subsequently transfer it to you. The spousal exemption continues in the tax year of separation, provided you are living together. From what you describe as him being non-resident, it is likely that he is liable to capital gains tax based on market value of the property on the date of transfer.
There is one home per person or per married couple. Therefore if he is transferring his former home, he will probably be exempt from tax on the disposal. On the basis that you are separated and living apart on the disposal date, the spousal exemption would not apply, and you would obtain the CGT free uplift in value desired.
You seem to have a misconception that your husband will not be liable to tax because he is non-resident. This is not the case. Any person is liable to CGT on disposal of UK property. For non-residents, value on April 2015 is used instead of cost for determining taxable gain.
My wife and I currently own and live in a property in Honor Oak Park and also have a buy to let in Brighton which we plan to move into shortly.
We intend on renting out our London property at least initially but have concerns about our potential capital gains tax liabilities since the property has increased in value significantly since we bought it.
I'm looking for some advice on projected capital gains tax liabilities in order that we can work out when would be the best time to sell.
My number is 07855451219
Thanks and best regards
Ben Johnson