Selling a property

[LuLondon]

My fianc� and I both own a property under our own names. After we get married next year we intend to sell one of the properties. Would we have to pay more tax selling the property after we are married rather than selling it now?

[Miss Zippy]

Your marital status won�t affect your tax position in this particular situation, where you each own your own asset and will continue to do so after the marriage (until the property is sold). In order to avoidance Capital Gains Tax (CGT), which is the tax you or your fianc� would be subject to, the property being sold must be your/your fiance�s main residence at the time of sale � i.e. if it�s not too late, it would be wise not to move out of your own homes until you have decided which one is to be sold and it has actually been sold.  If you sell a property which is not your main residence (e.g let's say you have moved out of your home to live with your fianc� in his), you will potentially have to pay 40% of any profit you make over �8,200 (everyone gets a CGT allowance which for the current tax year is �8,200).  However, taper relief applies to CGT but this only kicks in if you have held the asset for at least three years. Basically, the longer you have held an asset before selling it, the less CGT you pay (it reduces on a sliding scale from 40% to 0% after 10 years I believe).  Once married, the CGT position will not change � you will both still each have an annual CGT exemption of �8,200 (this tends to increase slightly each year in the budget) but you cannot use each other�s exemptions (though you can, of course, pool together your exemptions on assets that are owned jointly). If one or both of you have already moved out of your home, it might be worth seeing a tax adviser to see how you can mitigate your tax position.

[Marsh]

I have been advised that if you move from your main residence to another one without selling the first, you have three years to sell the first one before you are liable to any capital gains on its sale.  I am in a similar situation and my accountant had me sign an Inland Revenue proforma letter to establish formally the date on which I moved.  The text of this ran:
"On (date1) I acquired (new address) as a private residence.  I still own (old address).
I give notice under s.222(5)a TCGA 1992 that for the purposes of ss.222-226 TCGA 1992.91 (new address) became my main residence with effect from (date2)."
My accountant didn't tell me this of his own knowledge � he took advice from a specialist in this field.  So the good news is you can escape Capital Gains Tax.  The bad news is you may need to pay for advice.  First stop Citizens Advice bureau, perhaps?