Selling to my Spouse - Stamp Duty ?

N

Niallymac

Registered User
Messages
100
I know I can transfer a property to my wife without stamp duty, but can I sell the property to her without stamo duty ?

Why would I want to sell her the property ? The property in question was my PPR for 3 years (bought 6 years ago), rented since. As it currently stands, my CGT liability in the event of a sale would only be 2/6ths of the gain on purchase price. There is a realtively small outstanding mortgage on the property, and a lot of equity. We don't want to sell it, but would like to free up the equity to pay off our current PPR loan. Obviously a simple remortgage has no tax benefits, as the interest on the new loan won't be eligible for offset purposes, but if I could sell it to my wife at market value then the new mortgage taken out on the property would be eligible for offset against income, as this new mortgage would have been used to acquire the property.

I could then pay my CGT due, we could hang onto the house, pay of the mortgage on our PPR, and offset the full mortgage interest on the rental against income.

I revert back to my first question, does the sale to my wife attract stamp duty ? If so it somewaht negates the benefit of the transaction. Presumably thi is open to revenue interpretation ?
 
Niallymac said:
I know I can transfer a property to my wife without stamp duty, but can I sell the property to her without stamo duty ?
Click to expand...
You can transfer capital assets to a spouse free of stamp duty but I'm not sure if that still applies if they purchase the asset.

Presumably thi is open to revenue interpretation ?
Click to expand...
It's possible that such a transaction could fall foul of the revelant Revenue anti-avoidance rules since, while it is not illegal per se, it does seem to be artifically structured simply to avoid tax. You should get independent, professional advice on this.
 
As far as I know, transfers between spouses are not recognised for CGT purposes. Hence the above strategy is likely to be useless in terms of saving you tax.

Always, always get formal professional advice before making decisions on strategies such as the above.
 
ubiquitous said:
As far as I know, transfers between spouses are not recognised for CGT purposes. Hence the above strategy is likely to be useless in terms of saving you tax.
Click to expand...
Good point. The CGT liability will not crystallise on the transfer to a spouse but will carry over as far as I know.
 
This is a very good tax reduction method of dealing with renting your previsously PPR property

In fact it was so good that Revenue had been caught a number of times and introdcued legislation to prevent exactly the situation you are talking about

It was introduced to stop obtaining taxrelief from the interest on money purchased rather than the CGT issues

I cannot find the link to the specific legislation but it relates purley to transactions between spouses and on residential property

If you have commercial property in the same situation it (but professional advice should be obtained) could be perfectly legitimate

[email protected]
 
Presumably this is anti-avoidance legislation along the lines of what I was hinting at earlier?
 
I would have thought so - unless there were particular circumstances under which it made sense to undertake such a transaction, apart from any tax benefits.
 
You must log in or register to reply here.
Back
Top