Capital Gains and my ex

[shreeve]

Hi My ex partner (unmarried) and I bought a property together (mortgaged)and converted it into 4 apartments. I paid for most of these renovations totalling about 100K. We have rented them out for several years although I never recieved any of the income of these. He recieved all of it. It totalled about 10K a year profit.
Last year we split up and he transfered the mortgage into my soul name and I have been renting it out since. I now want to sell all the properties but I'm worried about the Capital Gains tax.

We got them for £190K and they are now worth about 300K.
I spent 100K of my money to pay for the renovations- 1) I remortgaged an old property 2) I took some credit cards 3) Borrowed money from family.

Slight issue- As I was working (and in 40% tax bracket) he managed all the outgoings and renovations using my money but has kept the reciepts and wont hand them over. Does that mean what I cant prove, I will have to pay Capital Gains tax on? What else can I use to prove that I spend alot of money on renovating the apartments? I maybe able to show some money transfers going into his bank.

Will he be liable for any of the CGT?
What happens about the years that he received the rental income and the tax on this? If he didnt do a tax return would I be liable even though I never got a penny and can prove from the letting agent where the money went?

I'd really appreciate your help on this

[King_Maker]

Income Tax - it depends on whether you want to get 50% (or whatever split was agreed) of the rental income/profit or not. If not, he is likely to be liable for any tax since he received all the profit prior to transfer.

Capital Gains Tax - I assume he transferred his share (50% ?) of the property to you at the same time as the mortgage? He may have a CGT liability for this. You could have a CGT liability on sale - any mortgage is disregarded for CGT purposes.

I would recommend professional advice asap.

[shreeve]

When he received the rent there was nothing I could do at the time as the letting agent contract was with him so he took all the money which I can prove.

As for the tranfer. Yes, he transferred the 50% of the property over to me at the same time as the mortgage. What I want to make sure is that I am not the only person responsible for the Capital Gains tax as it's only been in my name for about 6 months. He kept all the reciepts for the renovations I paid for as in effect I was working and paying him to manage the build. He is refusing to give the receipts to me so I'm worried I am liable for the whole lot of CGT. Obvisouly I want him to give the receipts over as the property has increased substantially and alot of the money from this came from me! Help!

[King_Maker]

Yes, you may be liable for all the CGT, but are you are not keeping all the sale proceeds?

[shreeve]

Yes I will be keeping the profit although from what I put in, I'm likely to make a loss.
I paid £190K for it
I put 131K into renovate it
I BACS transferred money to him- About 80K (which was a remortgage of my house) and the rest was on credit cards in my name where I gave him the pin
He has all of my bank statements and kept all of the original receipts so I dont know what I can do. I have paid off most of the credit cards from my salary but I obvisouly want to recoup this money when I sell it. How and what can I do? I dont want to pay Capital gains tax on a property which I have put all that money into- It's just hard to prove it.

Obvisouly I can try and get copy banks stataments but not sure about the 80K I bacs transferred to him to manage the project and pay suppliers etc.

Help!

[King_Maker]

There may be no CGT, if the purchase price + capital expenditure etc exceed the sale proceeds.

All he appears to have gained, in financial terms, is the rental profit (less income tax)?

Have you contacted a solicitor? Was there any written agreement in respect of the "settlement"?