I currently jointly (50:50) own the UK property I live in, with a sibling who is a non-UK resident.
I have been the sole resident of the property over the past few years and am now contemplating relocating due to work commitments. Because of this we are now considering our options in terms of either renting or selling the property. I have a few questions related to both options:
Renting the property:
1) If the property were to be rented, would the income received need to be split equally between the two owners? By mutual agreement, I have been living in the property almost rent free over the last few years (bearing repair/maintenance costs) so wanted to understand whether there would be anything stopping my sister from receiving a larger share of the income when it is rented. I.e. would the rental income need to be split equally as each of us owns a 50% share of the property? Or can the rental income be split between us so that my sister receives a higher %?
2) If the latter can be done, would any form of legal document need to be drawn up to indicate the exact split for the purposes of establishing tax liability?
3) What income tax would my sister be liable to pay in the UK on the rental income? She is an overseas citizen and a non-UK resident.
Selling the property:
1) Given that we own equal shares of the property am I correct in understanding that each of us would be liable to pay CGT on 50% of the capital gains?
2) My parents originally bought the property (approximately 30 years ago), and 50% of ownership was transferred to each of us at different points in time in the past. So initially my parents jointly owned it. Thereafter one parent and sister jointly owned it. Finally my sister and I now jointly own it. Given these circumstances, how would the capital gains amount be calculated to establish how much CGT each of us is liable to pay?
3) Is there any difference in what taxes my sister would be liable to pay given that she is a non-UK resident?
I am a novice in property related tax matters, so would appreciate assistance in getting answers to these preliminary questions. Apologies if these questions do not all fall under this sub forum.
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