CGT implications Transfer of Equity

[dotto]

I hope someone can help with this:
1 Purchased leasehold flat in 2000 for £50000 to rent out with a BTL mortgage.
2 Flat Valued at £130,000 in 2008 at which time the BTL was approx. £57000
3 Partner bought into flat in March 2008 and BTL mortgage adjusted accordingly (increased to £83000). Partner put in £26000 which money I had.
4 This was done at the time because there was a change in CGT rates - I really cant remember exactly why we did it but that springs to mind (taper relief?) (although didn't CGT go down at that time). I have had many transactions etc since then and I know it is ridiculous that I have mislaid any documentation we had. I may have needed the lump sum for some other transaction.
5 Partner has had share of rent and we have both paid tax accordingly.
6 Partner now transferring his share of the equity back and therefore I will repay him his £26000 as we have always agreed I would do.
7 Flat has 75 years on lease which I am currently trying to extend. Flat is probably worth at the moment approx. £120000.
8 The flat will revert to being in my name only with a mortgage of £83000 as before.
9 Therefore to summarise: Flat in my name only until March 2008 - initially bought for £50,000 in 2000, valued at £130000 in 2008. In joint names until March 2014 - return £26000 to partner - Flat back in my sole name - take on £83,000 mortgage.
10 If for example I sell the flat next year say for £130000 (with increased lease), what would be my position as regards CGT.

Am I in an even bigger mess than before I started!!!

Many thanks for any help and advice.

[dotto]

From asking around I think the following might apply

Sale price less original buying price and less expenses ( including 2 sets of conveyancing fees + sellling agent fee + lease extension cost )

= 130K - 50K - ( conveyancing fee (assume 2% = 2600 ) - selling agent ( assume 1500 ) -1500 - extension ( say 10K) = 130K - 50K- 2600 - 1500 - 10K = 65,900 approx capital gain.

Personal capital gains alllowance of 10,900 so can expect a taxable gain of 55,000 which is charged at 18% or 28% .

HOWEVER
If partner stays on as 50% owner would he be charged capital gains and could we use his allowance against the total gain.

Also I have a loss with HMRC on the sale of a property in 2012. How long does this remain eligible to use against a gain in the future.

Any help would be much appreciated.

[bd6759]

You have forgotten about the disposal you made in 2008.

You sold half the property for £26,000. The formula for working out the cost to be applied to that disposal is A/(A+B), where A is the amount received and B is the value of the part retained. You received 26K and retained £65K (half the value at that time). So the allowable cost is:
50K x 26K/(26K + 65K) = 14.2K. Before taking into account any conveyancing fees you made a gain of 26K - 14.2K = 11.8K.
Your costs for the property become 50K - 14.2K = 35.8K.

When you re-purchase the half share, your costs increase by £26K to 61.8K, and you estimate that you will pay £10K to extend the lease, therefore the cost increases to £71.8K.

When you sell the property, your gain will be £130K - 71.8K = 58.2K before taking account of any conveyancing expenses.

If you sell the property as joint owners the gain will be:

You: 65K - (35.8K + 5K (lease extension)) = £24.2K
Him: 65K - (26K + 5K) = £34K

[bd6759]

The above assumes that when you say "partner" you don't mean husband or civil partner, or a relative.