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I have a client who was gifted a property by his mother in 1996. He subsequently transferred a half share to his wife in April 2007.
They have only recently sold it. In ‘Joint calculation’ Taxation 18 January 2011 (tinyurl.com/yusunvru) one of the Readers’ forum replies to a similar situation suggested that the wife would be entitled to indexation allowance from 1996 to April 2007 to be added to her acquisition value and used against capital gains tax for the current transaction.
Do readers think that this is a fair interpretation of the application of the rules and would her husband also be so entitled?
Query 19 995 – Rupert.
Wife will have a lower gain than husband.
Indexation allowance prevented taxpayers from paying capital gains tax on the inflationary growth in assets attributable to inflation.
It worked by adjusting the purchase price of...
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