CGT and changes to joint ownership of rental property
Posted: Fri Jan 12, 2018 7:34 pm
Husband and I Sold rental property last year for 234500 and currently preparing to submit returns. I would like to clarify a couple of things that we are uncertain about.
Brother and I inherited this property early 2011 - At probate we were too conservative re property value 193k as we fully intended to sell and our mothers estate fell well within IHT threshold. Property was marketed at 205000 in 2011 ( I have evidence dated april 2011) however we were advised to rent property as letting market was more buoyant - tenancy started early 2012.
My brother needed to realise his share so I transferred amounts of money to value of just over 100k over 2012 to 2014.
I ran the property rental myself and took care of all income and tax due. I have a letter of agreement to this effect.
In 2015 he relinquished any claim and his share was transferred over to my husband ( via a solicitor).
Now that I come to complete the CGT pages on returns I wonder that there is something we have missed and should sort out. I will have to pay CGT for half of gain between 2011 and 2016. My husband half gain between 2015 -2016 ( I can get an estate agents letter of valuation backdated to 2015 - I estimate this to be in region of 220000).
Having read more guidance and information about CGT I am worrying about any implications for my brother - Is the money I paid him for his share considered a gain if so I estimate this gain at half of 220k less 205k - therefore well within CGT allowance. Are there any other factors that I need to consider? How should I word all this to HMRC within our returns?
I hope someone can clarify things for me . In anticipation
lesleyd
Brother and I inherited this property early 2011 - At probate we were too conservative re property value 193k as we fully intended to sell and our mothers estate fell well within IHT threshold. Property was marketed at 205000 in 2011 ( I have evidence dated april 2011) however we were advised to rent property as letting market was more buoyant - tenancy started early 2012.
My brother needed to realise his share so I transferred amounts of money to value of just over 100k over 2012 to 2014.
I ran the property rental myself and took care of all income and tax due. I have a letter of agreement to this effect.
In 2015 he relinquished any claim and his share was transferred over to my husband ( via a solicitor).
Now that I come to complete the CGT pages on returns I wonder that there is something we have missed and should sort out. I will have to pay CGT for half of gain between 2011 and 2016. My husband half gain between 2015 -2016 ( I can get an estate agents letter of valuation backdated to 2015 - I estimate this to be in region of 220000).
Having read more guidance and information about CGT I am worrying about any implications for my brother - Is the money I paid him for his share considered a gain if so I estimate this gain at half of 220k less 205k - therefore well within CGT allowance. Are there any other factors that I need to consider? How should I word all this to HMRC within our returns?
I hope someone can clarify things for me . In anticipation
lesleyd