01793818400 admin@ams-accountancy.co.uk

My investment property earns annual rent of £15,000 and is my only income. Should I transfer half to my husband to reduce my Capital Gains - he earns £60,000 p.a.

Transferring assets between husband and wife can reduce Capital Gains Tax – but timing is important

Possibly – but not yet. As he is currently a Higher Rate Taxpayer, transferring half the ownership to him now will result in him paying 40% tax on his share of the rent while you currently pay no more than 20% on it.

There happens to be no Capital Gains Tax on transfers between spouses so you don’t need to rush ahead with the transfer. It is probably better to keep things as they are, then, if you decide to sell the property, you should find out the likely Capital Gain, and Tax, for selling the property as sole owner. Then work out the same taxes for joint ownership and decide if you will benefit by transferring part of the property to your husband. It may be worth consulting an accountant or solicitor about owning the property as ‘tenants in common’.