Transfer between spouses, tax avoidance?

H owns house and transfers to H&W just before exchange to get 2 allowances- is this still ok or under new rules do we think this could be tax avoidance and notifiable?

Claire Muirhead

As ever, you need to have regard to all the facts and circumstances both before and after the disposal, but you may draw comfort from example D19 Gifts between spouses in the GAAR guidance, which considers standard tax planning on gifts between spouses.
See GAAR guidance examples - HMRC website

Carlton Collister
landtax llp

As Carlton points out D19 must provide some considerable comfort.

What will be of interest to HMRC in practice is whether the paperwork is in order. Basically, can they find enough nails in the coffin to levy CGT only on H. The bigger the numbers the greater HMRC’s interest.

For example, is there any evidence to suggest that W is acting as nominee for H. Other things being equal, the less W has been involved prior to exchange the stronger the possible argument W was merely as a nominee.

Has the (presumed) declaration of trust been timely and correctly executed. Did W file a Form A restriction.

50% (or the relevant percentage) of the net proceeds of sale should be remitted directly to the bank account of each of H and W ie not to their joint account.

Just a few thoughts.

Malcolm Finney

S102B3a. Client proposing to give away 95% share in rented property but wants to keep the rent. Previously considered acceptable under S102 but is this now considered risky because of GAAR provisions? One lecturer has said so at a recent course. Does anyone have recent experience of acceptance or challenge by HMRC?


Claire Muirhead
Farnfields Solicitors