Does a property transfer have tax implications?

Q The house my wife and I live in is registered at the Land Registry in both our names. Could you advise me on the costs and tax implications of transferring my half of the house to my wife? CR

A If you do the transfer yourself, by filling in forms AP1, TR1 and ID1 from the Land Registry, the only cost involved will be its fee, which ranges from £50 to £920 depending on the value of the property. However, the fee will be cheaper for all transfers completed on or after 22 October 2012, when most Land Registry fees are being reduced by 10%.

If you don’t go down the DIY route you will need to pay a solicitor or conveyancer to deal with the Land Registry on your behalf.

As far as tax goes, there’s no capital gains tax (CGT) bill because transfers between husband and wife (and civil partners) are free of CGT provided you are living together (or the transfer occurs in the tax year in which you separate). However, when your wife comes to dispose of the property, its “value at acquisition” would be its value when you jointly acquired the property rather than the value when you transferred your share to your wife.

There is also no stamp duty land tax (SDLT) bill provided the transfer is an outright gift. If by transferring your share of the property to your wife she takes on your share of the mortgage, or pays you cash for your share, there may be an SDLT bill based on the amount of the “consideration” given, which would either be the amount of mortgage she takes on or the cash paid. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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