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Where Taxpayers and Advisers Meet

CGT on rented property with Charges due on disposal

strong
Posts: 4
Joined: Wed Oct 22, 2014 1:01 pm

CGT on rented property with Charges due on disposal

Postby strong » Tue Apr 16, 2019 9:53 pm

I am selling a rental property for £380k bought in my name in 2014 for £300k. It was always intended to be a family asset (evidenced by family emails) but it took until 2016 to put a charge on the deeds for 2 other relatives, stating that in the event that it must be sold, they would each be due a third of the value 'after all costs'. This took 2/3 of the value out of my estate for IHT and reassured them of their share of the asset. In the meantime I have paid all maintenance costs and income tax on the rent.
Who now pays CGT on what share? There is an overall capital gain of £60k after purchasing costs. I will only receive a third of the proceeds of the sale although I did pay for the entire property + costs in 2014.

pawncob
Posts: 4352
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: CGT on rented property with Charges due on disposal

Postby pawncob » Fri Apr 19, 2019 10:20 am

I would assume that the deed of gift is dated, and the ownership follows from that.

(Assuming there was a deed of gift......................................)
With a pinch of salt take what I say, but don't exceed your RDA

maths
Posts: 7561
Joined: Wed Aug 06, 2008 3:25 pm

Re: CGT on rented property with Charges due on disposal

Postby maths » Fri Apr 19, 2019 12:57 pm

I'm afraid your post is somewhat contradictory.

It is in particular unclear whether each of your two relatives have each acquired a beneficial in the asset or whether you have retained beneficial ownership and have simply agreed that on a sale you will share out the proceeds.

The CGT consequences will be different.

strong
Posts: 4
Joined: Wed Oct 22, 2014 1:01 pm

Re: CGT on rented property with Charges due on disposal

Postby strong » Fri Apr 19, 2019 11:04 pm

Initially I retained beneficial ownership but have shared rental income and costs with the other two parties since April 2018. I agreed to share out the proceeds of the sale of the property in 2016.


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