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Where Taxpayers and Advisers Meet

CGT and Declaration of Trust

CGT Newbe
Posts:9
Joined:Tue Mar 06, 2018 3:55 pm
CGT and Declaration of Trust

Postby CGT Newbe » Fri Apr 19, 2024 6:24 pm

Could someone in the know give me a heads up please as to my situation below and what I will/wont be subject to for CGT......

My partner and I are not married.
We both owned flats when we got together years ago which we rented out.
My partner bought our current home 12 years ago in her name and we have a declaration of trust 50/50 to protect my interests.
My partner also bought a holiday home 7 years ago but we never set up a Declaration of Trust. We have since agreed we will put one in place 50/50 to protect my interests in that property as well.

I have always assumed, rightly or wrongly that for tax where we live is our main/primary home so when we recently sold the flats we each paid the CGT for our flats based on the normal lived in/let out rules etc. We have now decided to separate.

Will I be liable for any CGT (or other tax) on my share of the main home if we sell it or transfer ownership to me?

Am I right in assuming that we will both be liable for CGT on our respective shares of the holiday home whether we sell up or transfer ownership to me?

Thanks in advance!

bd6759
Posts:4290
Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT and Declaration of Trust

Postby bd6759 » Sun Apr 21, 2024 10:33 am

CGT is payable on disposals. Your main home is exempt.

You say that a DOT was set up to “protect your interest.” The creation of the DOT might indicate a disposal by your partner to you which ought to have declared at that time. It is necessary to understand what interest you held before the DOT was created.

CGT Newbe
Posts:9
Joined:Tue Mar 06, 2018 3:55 pm

Re: CGT and Declaration of Trust

Postby CGT Newbe » Mon Apr 22, 2024 10:12 am

Hi and many thanks for the reply.

Your point on the DOT and my interests before the DOTs were set up, I assume you mean on the holiday home? So I believe my interest before we set up the DOT and after would be unchanged. We would be formalising the existing arrangement between us which was the house was bought based on a 50/50 ownership agreement. The reason to set up the DOT now is purely to make sure I have a claim on my share in case of things going sour during the separation. Is this what you meant?

Thanks.

AGoodman
Posts:1764
Joined:Fri May 16, 2014 3:47 pm

Re: CGT and Declaration of Trust

Postby AGoodman » Thu Apr 25, 2024 12:09 pm

Did you contribute to the purchase price of the holiday home at all? If you paid 50% then you can make a declaration of trust now which states that it is recording the original agreement.

if you didn't contribute anything originally, it is difficult to say that it was always held 50:50 and important to take some proper advice to confirm the position.

bd6759
Posts:4290
Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT and Declaration of Trust

Postby bd6759 » Thu Apr 25, 2024 5:45 pm

A DOT cannot create a fact and does not transfer an interest. All it can do is confirm an existing fact. If your partner always intended that she would hold the property on behalf of you both, the DOT will confirm that.


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