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A husband owns a flat (mortgaged). He is selling it after marrying earlier in the year. Some capital gains tax will be payable as he no longer lives there - the couple moved into a larger place together some years before getting married.

Can the couple use both spouses' capital gains tax allowances? Thank you.

Edit: As it is quite a small flat, there may be little need for the extra allowance, as it appears that because the husband used to live in the flat, until the government budget changes take effect in 2020, he will also be able to claim Letting Relief.

  • Are you filing separately ? (I assume that's a thing in the UK) Generally when filing a joint return you get double the deductions vs filing separately, so either way you should be fine (I know nothing about the UK, but since the US and German systems are fairly similar in that regard I feel like making an assumption is warranted) – xyious Oct 22 '18 at 16:37
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    There are no joint returns in the UK; joint taxation of married couples was abandoned in 2001. (The closest thing is you get these days is the so-called "Marriage Allowance" which lets you transfer a token amount of personal allowance to a basic-rate paying spouse gov.uk/marriage-allowance). – timday Oct 23 '18 at 22:59
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    You would be probably eligible for partial private residence relief (gov.uk/government/publications/…) – Conrad Nov 29 '18 at 16:14
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My understanding (I'm no expert) is that he'd basically have to give his wife a share in the property before it's sold. Then she's liable for any CGT on any gains on her share of the sale proceeds. (No CGT arises from the transfer!)

There's some detail on how to achieve this here; it mentions "a declaration of trust which must be in a the form of a deed". Note that the mortgage may be a complicating factor!

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    Ah, the husband could not give away part of the flat without the lender's permission if there is a mortgage ie. he cannot "give away part of the equity" (also because it might change the loan to value to something unacceptable to the lender)? – nsandersen Oct 26 '18 at 9:08
  • @nsandersen Yes I think that's the basic issue. The mortgage provider's contract is between you and them; if the wife was also to become party to that then they'll at the least need to assess her creditworthiness etc and create a new contract. Expect fees. OTOH if you're both earning and can afford it, it ought to be a risk reducer for them and so hard to see why they'd object. – timday Nov 12 '18 at 16:58

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