Joint ownership

[Chalim]

My wife and I are buying a flat (by cash) and intend to allow our daughter to live there for a nominal rent in the early years but rent out the other bedroom (and common areas). My wife and I will have joint ownership but are wondering about the pros and cons of gifting part of that ownership to our daughter to further reduce CGT etc. Are there likely to be any complications with this arrangement (e.g. will putting our daughter's name on the register ensure she has an entittlement to CGT allowances etc or does there need to be an additional document setting this out? Does she need to receive 1/3 of the rent in order to have equitable title and having received a third of the rental income, will she then be taxed on it?)

[mark]

It sounds like you will not be living in the flat. You can dispose of a joint interest to your daughter, but you may wish to do it before any increase in the property value, as you are making a disposal for CGT purposes.

In practice, property income tends to be taxable according to beneficial interests. If your daughter receives a share of the rental income, she will be taxable on it.

Hope this helps.