The Jonathan Ford & Co Advent Calendar – Day 8
Over the course of the festive season we’ll be bringing you an advent calendar’s worth of tax and financial tips. Some of them might even be a little Christmassy! Day 8 of advent, so it’s time to look at some serious tax savings with…
Simple capital gains tax planning
The transfer of an asset, or part of an asset, between spouses (or civil partners) is exempt from capital gains tax. This forms an important part of any capital gains tax planning exercise.
As with income tax, there is an annual allowance which allows the first £12,000 of gains to be free from capital gains tax. So sharing assets between spouses will mean that up to £24,000 of gains will be tax free, an additional saving of up to £3,360.
The assets can be transferred at any time, even immediately prior to sale. For example, it may be better for a basic rate taxpaying spouse to 100% own a buy to let property if the other spouse is a higher rate taxpayer. At the point the decision is made to sell the buy to let, then the spouses can become joint owners to get double the capital gains tax annual exemption.
Beware: even though this is a basic point of tax planning, you should always consult with a qualified accountant before embarking on any tax planning exercise.
