Avoiding the 28% CGT rate with joint ownership

Purchasing jointly with someone else can substantially reduce the capital gains tax ('CGT') charge particularly where they are low/no taxpayers. Not only do you get the benefit of their annual CGT exemption, but you can also utilise an additional basic rate band which can be taxed at 18%, as opposed to 28% on you (assuming you've used your basic rate band). Therefore you'll see planning such as: Making effective use of a spouses basic rate band If you have a spouse who is a basic rate taxpayer or who has a very low income it makes even more sense to transfer an interest in the property to them prior to a disposal. The transfer to the spouse would be a tax free transfer and this would then allow an additional annual exemption and basic rate tax band to be offset. Buying with a child Buying with a child can also be advantageous to make use of their annual exemption and basic rate tax band. You would need to ensure that the property (or other asset) was actually purchased with them as the joint owner. If not, and you tried to transfer an interest in the property to them before a sale this would crystallise a capital gain on you. Although for income tax there are anti avoidance rules that can tax income arising to a child on the parent where the income arises from a transfer from the parent, there is no such rule for capital gains tax purposes. This means that a parent could purchase with their children whether they were above or below the age of 18. They would however need to ensure that the actual ownership interests represented reality and that the children were entitled to their share of the property/asset etc. Note that the child would not even need to be a non taxpayer to benefit. If they had a small income they could utilise the remaining part of their basic rate tax band which could significantly reduce the effective CGT rate. There would be nothing to prevent the child gifting proceeds back to the parent in the future depending on the precise circumstances.