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Where Taxpayers and Advisers Meet

Split ownership valuation

Umar
Posts:67
Joined:Wed Aug 06, 2008 3:36 pm
Split ownership valuation

Postby Umar » Mon Jun 18, 2018 7:15 am

Hi

If a property is worth £1m but a 50% share worth £200k (due to the market value being lower for a share in a property due to lack of control), if I gift my share to someone, does HMRC accept the £200k market value?

Or die HMRC just take 50% of the £1m (full market value)?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Split ownership valuation

Postby bd6759 » Mon Jun 18, 2018 10:21 am

Your premise is correct, but a 50% share will be worth far more than 20%.

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Split ownership valuation

Postby AdamS93 » Mon Jun 18, 2018 1:40 pm

HMRC will generally agree to a reduction of between 5% to 15% of their share of the overall value.

You’re kidding yourself if you think a 50% share in a £1m property is worth only £200k. More like £450k.

Umar
Posts:67
Joined:Wed Aug 06, 2008 3:36 pm

Re: Split ownership valuation

Postby Umar » Mon Jun 18, 2018 1:49 pm

HMRC are kidding themselves if you can sell a part share in a property for 5-15% less than the complete market value!

But those are the rules and thank you!

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Split ownership valuation

Postby AGoodman » Wed Jun 20, 2018 8:33 pm

Do not forget that a 50% owner could usually bring about the sale of the whole and collect 50% of the proceeds.
The value isn’t based on finding an oddball who wants to own 50% of a house with a stranger.


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