THING YOU NEED TO DO TO GET TAX RELIEFS  BEFORE THE TAX YEAR ENDS.

Tax reliefs could be lost when taxpayers do not take certain actions before the tax year ends!

In this blog, I would like to highlight one of the things that you need to do before the tax year ends on the 5^th of April in order to enjoy tax reliefs and save tax.

Transfer your capital asset to your husband/wife/partner.

When you transfer your capital asset to your spouse, it’s a capital gains transfer.

This transfer is made to a related party and therefore the market rate of the property will be used in accessing the capital gains due.

The tax on the disposal is usually based on the gain on the property disposed or transferred.

Do you pay tax on the capital asset transferred to your spouse?

This transfer however is not a chargeable transfer under capital gains tax.

By moving some of these capital assets tax-free to your spouse, you could save tax in several ways such as:

How to save tax when you transfer an asset to your spouse?

• By transferring the capital asset to your partner, they can utilize their annual exemption to save tax.
• If either of you pays tax at 40%, it could be tax-efficient for the taxpayer paying tax at the lower band to dispose of the property.
• In the case of transfer of a rental property, you could also reduce the income tax paid by owning the property together with your spouse.
• By doing this you reduce the tax paid on rental income earned by sharing the income into two and paying tax individually.
• The benefit derived from this will even be more if one of the partners pays tax at 40%, it’s more tax-efficient to move to the property to party paying lower tax.

Conclusion on saving tax by transferring the asset.

Thanks for reading this blog post.

The date of transfer will determine the tax year that the disposal was made and when tax relief could be claimed.

Note that you will have to make a declaration of this disposal within 30 days that the transaction occurred.

This declaration so HMRC needs to be made to prevent paying the late penalty fine.

If you would like me to support you with transferring your property to your spouse, kindly contact me at https://taxgirl.co.uk/contact/