Got a credit card? use our Credit Card & Finance Calculators
Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site
Selling a second home
-
- 2 Lemon pips
- Posts: 136
- Joined: August 13th, 2017, 9:51 pm
- Has thanked: 38 times
- Been thanked: 30 times
Selling a second home
So we are looking at selling our holiday home.
The title deed is in my wifes name and she is a standard tax rate. I have not work this financial year.
We had the place valued and it looks like we would have a £70-80k 'profit' on the purchase price 7-8 years ago.
From reading .gov site this would push her into high tax rate so 28% cgt on large proportion of the sale.
Am assuming we can offset
Initial cost of purchase - cost, stamp duty, solicitors, searches etc.
Any updates we did - clearing out, all new flooring, pluming in new toilet and shower etc.
Selling cost - estate agents, solicitors etc.
Then wife would have £11.7 cgt and about £18k before the high rate tax band.
Could we easily (and cheaply) add me to the title deed (so allow us to use my cgt(£11.7k) and tax allowance (about £10k as have already pasted on £1k to my wife) before selling or is there a minimum time before selling?
Know there are a lot of questions there. Not sure who to ask - solicitor, accountant, ifa?
Any help or advice much appreciated.
C
The title deed is in my wifes name and she is a standard tax rate. I have not work this financial year.
We had the place valued and it looks like we would have a £70-80k 'profit' on the purchase price 7-8 years ago.
From reading .gov site this would push her into high tax rate so 28% cgt on large proportion of the sale.
Am assuming we can offset
Initial cost of purchase - cost, stamp duty, solicitors, searches etc.
Any updates we did - clearing out, all new flooring, pluming in new toilet and shower etc.
Selling cost - estate agents, solicitors etc.
Then wife would have £11.7 cgt and about £18k before the high rate tax band.
Could we easily (and cheaply) add me to the title deed (so allow us to use my cgt(£11.7k) and tax allowance (about £10k as have already pasted on £1k to my wife) before selling or is there a minimum time before selling?
Know there are a lot of questions there. Not sure who to ask - solicitor, accountant, ifa?
Any help or advice much appreciated.
C
-
- Lemon Slice
- Posts: 555
- Joined: November 10th, 2016, 10:04 am
- Has thanked: 65 times
- Been thanked: 158 times
Re: Selling a second home
The risk is that the gift between spouses shortly before the final sale is challenged by HMRC under the Ramsay principle (of artificial transactions for tax avoidance), as I suspect you’ve found. However they will not object if the process is limited to this simple sequence between spouses; they are more interested in longer sequencing of artificial transactions. But your property solicitor will keep you straight.
-
- Lemon Quarter
- Posts: 1007
- Joined: November 8th, 2016, 2:20 am
- Has thanked: 130 times
- Been thanked: 196 times
Re: Selling a second home
chrissyr wrote:Then wife would have £11.7 cgt and about £18k before the high rate tax band.
Could we easily (and cheaply) add me to the title deed (so allow us to use my cgt(£11.7k) and tax allowance (about £10k as have already pasted on £1k to my wife) before selling or is there a minimum time before selling?
Yes.
It is a straightforward transfer via the Land Registry. You should do this before placing on the market and it can be DIY.
You are able to choose any proportion of the property - not just 50/50.
See TR1 and the fee table.
https://www.gov.uk/registering-land-or- ... r-property
https://www.gov.uk/government/publicati ... ansfer-tr1
https://www.gov.uk/government/publicati ... d-property
If a sole proprietor (such as Mr A) wants to transfer the property to two (or more) people including himself (such as both Mr and Mrs A), his name will need to be included as well. He cannot transfer just a share of the property.
No stamp duty on a transfer to spouse with no consideration.
-
- 2 Lemon pips
- Posts: 136
- Joined: August 13th, 2017, 9:51 pm
- Has thanked: 38 times
- Been thanked: 30 times
Re: Selling a second home
Thanks for the replies - explains it a bit better. Will see about talking to a conveyancing solicitor asap.
-
- Lemon Slice
- Posts: 329
- Joined: June 12th, 2018, 9:27 pm
- Has thanked: 86 times
- Been thanked: 115 times
Re: Selling a second home
Have you thought about further reducing the tax liability by investing in EIS schemes, I understand under in some circumstance you can?
-
- Lemon Slice
- Posts: 969
- Joined: November 4th, 2016, 6:17 pm
- Has thanked: 112 times
- Been thanked: 271 times
Re: Selling a second home
chrissyr wrote:Thanks for the replies - explains it a bit better. Will see about talking to a conveyancing solicitor asap.
You should do it yourself as it is so easy. Start filling out the form and ask for help on here if you need it. I had some help in relation to one question from the Land Registry who were exceptionally helpful. You do not need a solicitor.
-
- 2 Lemon pips
- Posts: 136
- Joined: August 13th, 2017, 9:51 pm
- Has thanked: 38 times
- Been thanked: 30 times
Re: Selling a second home
Hi all
So have been through all the docs and have filled in the TR1, AP1 and it says we need to do ID1s and take them to a local office - nearest is Croydon (20 miles) to be witnessed. Is this right? Or am I misunderstanding the current process?
So day off work to get there etc - why not get a local solicitors to do it - how much is that likely to cost?
C
So have been through all the docs and have filled in the TR1, AP1 and it says we need to do ID1s and take them to a local office - nearest is Croydon (20 miles) to be witnessed. Is this right? Or am I misunderstanding the current process?
So day off work to get there etc - why not get a local solicitors to do it - how much is that likely to cost?
C
-
- 2 Lemon pips
- Posts: 119
- Joined: November 16th, 2016, 9:25 pm
- Has thanked: 99 times
- Been thanked: 39 times
Re: Selling a second home
chrissyr wrote:Hi all
So have been through all the docs and have filled in the TR1, AP1 and it says we need to do ID1s and take them to a local office - nearest is Croydon (20 miles) to be witnessed. Is this right? Or am I misunderstanding the current process?
So day off work to get there etc - why not get a local solicitors to do it - how much is that likely to cost?
C
Do they accept post office certified identity documents? If so then you just need to go to a main post office (local ones don't do this service) and pay £10.50 for up to three documents to be certified. Link is:
https://www.postoffice.co.uk/document-c ... on-service
Regards, Puffster
-
- Lemon Half
- Posts: 6139
- Joined: November 4th, 2016, 1:12 pm
- Has thanked: 1589 times
- Been thanked: 1801 times
Re: Selling a second home
chrissyr wrote:Hi all
So have been through all the docs and have filled in the TR1, AP1 and it says we need to do ID1s and take them to a local office - nearest is Croydon (20 miles) to be witnessed. Is this right? Or am I misunderstanding the current process?
So day off work to get there etc - why not get a local solicitors to do it - how much is that likely to cost?
C
If you follow the links supremetwo provided, you should end up here (which includes a video I haven’t looked at)
https://www.gov.uk/government/publicati ... itizen-id1
Which leads to the ID1 itself https://assets.publishing.service.gov.u ... 05-25_.pdf and gives some alternatives on page 3 to visiting a “local” Land Registry Office.
Solicitors and Commissioners for Oaths charge a small fixed flat rate fee for certifying documents. Haven’t looked the amount up but something like £8.50 for one. Some charge the fee for each main document but maybe £2.00 for each supplementary page.
If you pop in to a local Solicitor, with all the completed documents and photos needed, they’ll tell you how much you’ll need to pay and usually would do it there and then (if there’s a solicitor available).
Take cash to pay - ClitheroeKid says the cash will go into the pot for their Christmas Party or something like that ...
Edit: They don’t seem to include the Post Office in their list.
-
- Lemon Quarter
- Posts: 1935
- Joined: November 4th, 2016, 10:25 am
- Has thanked: 216 times
- Been thanked: 457 times
Re: Selling a second home
PinkDalek wrote:chrissyr wrote:Hi all
So have been through all the docs and have filled in the TR1, AP1 and it says we need to do ID1s and take them to a local office - nearest is Croydon (20 miles) to be witnessed. Is this right? Or am I misunderstanding the current process?
So day off work to get there etc - why not get a local solicitors to do it - how much is that likely to cost?
C
If you follow the links supremetwo provided, you should end up here ....
If I've understood this right, the requirement is to
get your identity verified by a conveyancer *, a Chartered Legal
Executive or by personally attending one of our customer information centres
* Note: "A conveyancer is someone authorised under the Legal Services Act 2007 to provide legal services relating to
conveyancing and land registration and includes solicitors, licensed conveyancers, and conveyancing
practitioners authorised by CILEx Regulation to undertake reserved instrument activities and who hold
practising certificates. A paralegal cannot verify identity"
So it's not the same as getting someone to certify that a document is a true copy of an original. As such I suspect the cost is more like £30-£50.
-
- Lemon Half
- Posts: 6139
- Joined: November 4th, 2016, 1:12 pm
- Has thanked: 1589 times
- Been thanked: 1801 times
Re: Selling a second home
chas49 wrote:If I've understood this right, the requirement is to...get your identity verified by a conveyancer *, a Chartered Legal
Executive or by personally attending one of our customer information centres
Yes, it looks like I was on the wrong track.
You seem to have taken that extract from https://www.gov.uk/guidance/completing- ... f-identity and your further * seems to cover what is shown here https://assets.publishing.service.gov.u ... 05-25_.pdf at 2a:
2a. Complete this panel if you are a
solicitor
licensed conveyancer
notary public
barrister
CILEx Conveyancing Practitioner
Chartered Legal Executive Conveyancing Practitioner
Chartered Legal Executive
lawyer practising outside the UK
Then there's:
2b. Complete this panel if you are a serving officer of the UK armed forces operating overseas.
2c. Complete this panel if you are a HM Land Registry officer
So it's not the same as getting someone to certify that a document is a true copy of an original. As such I suspect the cost is more like £30-£50.
I'm guessing it might depend on where chrissyr is based. If I used our regular solicitors we wouldn't get much change out of £XXX. Maybe chrissyr should reconsider visiting the delights of Croydon, albeit 20 miles away and involving a day off work, but we don't know how much that would cost.
-
- 2 Lemon pips
- Posts: 136
- Joined: August 13th, 2017, 9:51 pm
- Has thanked: 38 times
- Been thanked: 30 times
Re: Selling a second home
Well I see they have an office in Gloucester which is a few miles from my young grandsons home so maybe a visit in the half term and a day out with him.
Just to be clear I have nothing against Croydon!
Thanks for the advice all
Just to be clear I have nothing against Croydon!
Thanks for the advice all
Re: Selling a second home
This may be too late to help, but the above rigmarole is probably overkill in that a transfer of legal title is not actually necessary.
All that is needed is for your other half to execute a simple 'declaration of trust' that she hereafter holds the legal title as trustee for herself and you in the proportion 50:50 (or other specified proportion). A solicitor could draw up such a declaration at relatively low cost.
I would endorse DrBunsenHoneydew's comment about the risk of HMRC challenge to transactions undertaken shortly before sale for tax avoidance purposes.
All that is needed is for your other half to execute a simple 'declaration of trust' that she hereafter holds the legal title as trustee for herself and you in the proportion 50:50 (or other specified proportion). A solicitor could draw up such a declaration at relatively low cost.
I would endorse DrBunsenHoneydew's comment about the risk of HMRC challenge to transactions undertaken shortly before sale for tax avoidance purposes.
Who is online
Users browsing this forum: No registered users and 7 guests