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Where Taxpayers and Advisers Meet

removing joint ownership

rks2018
Posts: 14
Joined: Sun Sep 16, 2018 1:27 pm

removing joint ownership

Postby rks2018 » Mon Feb 04, 2019 12:37 pm

I have 2 properties , one of which is lived in by sister , jointly owned , I wish to pay off the mortgage in 18 months and remove her name from property ,
Currently she has 2 lodgers are we are registered for self assesment . I f i were to remove her from ownership what tax liabilities are payable if there is no mortgage and how is this calculated please ?

pawncob
Posts: 4320
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: removing joint ownership

Postby pawncob » Mon Feb 04, 2019 12:53 pm

What does "remove her from ownership"mean?
Are you buying her half share? Is she giving it to you?
Please explain exactly what you plan to do.
With a pinch of salt take what I say, but don't exceed your RDA

rks2018
Posts: 14
Joined: Sun Sep 16, 2018 1:27 pm

Re: removing joint ownership

Postby rks2018 » Mon Feb 04, 2019 3:16 pm

Hello sorry ,
Meaning that she was only on mortgage to help me buy the property at the time it was purchased but because its jointly owned her share technically is 50% but there would no purchase price from me to her , I,d like to make things simplified now . thanks

Peter D
Posts: 10668
Joined: Wed Aug 06, 2008 3:37 pm

Re: removing joint ownership

Postby Peter D » Mon Feb 04, 2019 4:18 pm

Is her name on the deeds at the registray office. Regards Peter

pawncob
Posts: 4320
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: removing joint ownership

Postby pawncob » Mon Feb 04, 2019 4:35 pm

I'm going to assume that it is her principal private residence and that she is giving you her half share. There are no CGT implications as her gain is exempt.
However there may be Inheritance Tax implications if her estate is chargeable and she dies within 7 years of the gift.
With a pinch of salt take what I say, but don't exceed your RDA

rks2018
Posts: 14
Joined: Sun Sep 16, 2018 1:27 pm

Re: removing joint ownership

Postby rks2018 » Mon Feb 04, 2019 4:53 pm

Thanks ,
Just to clarify , It was my main residence for first 18 months , I then bought another house to move into but couldn't sell the 1st one , my sister moved in temporarily in the house and has looked after it since 2001 , but was mainly living with parents looking after them . in 2015 we started letting out to 2 tenants , in 2017 sister moved in permanent and has now to lodgers . we registered for self assessment in 2015 .
My own residence has been in 2nd property since 2001.
The mortgage on 1st property finishes in 2020 and I'm now thinking of removing sisters name from deeds when mortahr is complete , On self assesment I did tick column where it states if CGT would be payable .
What CGT would be payable please and from when , what allowances can be deducted and I'm guessing from the answer s so far , inheritance tax could be payable ?
Thank you

AGoodman
Posts: 805
Joined: Fri May 16, 2014 3:47 pm

Re: removing joint ownership

Postby AGoodman » Tue Feb 05, 2019 12:45 pm

It sounds to me as though your sister does not actually have an interest in the property.

So far as I can tell, she has not paid towards the property deposit or mortgage (you don't mention her paying) and she is giving away her legal interest for free.

To that end, it would have remained yours throughout. No tax on a transfer of the legal interest to you (probably just a TR1 from AB -> A if freehold) because for tax purposes it was and remains 100% yours.

The corollary is that all of the rental income was probably yours throughout.

pawncob
Posts: 4320
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: removing joint ownership

Postby pawncob » Tue Feb 05, 2019 1:25 pm

I think you need to clarify her legal position.
"she was only on mortgage to help me buy the property" - from which I infer she had an interest in the property. Whose name(s) are on the LR certificate/Deeds?
With a pinch of salt take what I say, but don't exceed your RDA

AGoodman
Posts: 805
Joined: Fri May 16, 2014 3:47 pm

Re: removing joint ownership

Postby AGoodman » Tue Feb 05, 2019 1:53 pm

To be clear, it sounds as though she has a legal interest as joint tenant (and registered as such) but no beneficial interest. She is effectively a trustee.

rks2018
Posts: 14
Joined: Sun Sep 16, 2018 1:27 pm

Re: removing joint ownership

Postby rks2018 » Tue Feb 05, 2019 2:09 pm

Hello ,
Both our names are on the LR deeds .
I pay tax as 50% share due to owning house equally .
Does it mean that if I take her name off ie by TR there will be no CGT to pay on her share ? But only when I sell ?
How will this or should be calculated please ? Thank you .


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