Question:
I have owned a house for 10 years but recently got married and moved into my wife's house. I would like to rent my house as an investment property but am concerned that if I sold it in few years time that the CGT liability would be great as I bought the property for £30,000 and it is now worth £150,000, having renovated it and benefitted from property price rises.
Could I sell the property back to myself (or to a company created for this purpose) in order that the purchase price on the house for future CGT would be today’s value?
Arthur Weller Replies:
You cannot sell your own property to yourself but you can sell it to a company, but I don't think that it is a very good idea. You are better off just retaining it in your own personal ownership and renting it out.
When you eventually come to sell it you will benefit from the last three years’ ownership exemption from CGT, plus the letting exemption during the period it was rented out, which can reduce the capital gain by up to £40,000. This will reduce and possibly eliminate any capital gain from now until you eventually come to sell the house.
