Hi, I hope the answer isn’t too obvious but forgive me as I have limited knowledge of CGT. Apologies this is long...!
In 2006, I purchased a property for 200k with a friend, with a mortgage, as tenants in common. I paid 9k of the deposit, he paid 1k (with an agreement that if we sold, any equity would split 90/10).
In 2011, he decided he wanted to sell as he intended to move in with his girlfriend. We had paid off around 10k of the mortgage, but as property prices had only just started to recover post-crash, the property was only worth about the value of the outstanding mortgage (190k). He agreed to walk away and transferred his “equity” (I use the term for technical purposes only - he had no true equity but only a liability) to my girlfriend (now wife) and me. This was done via a solicitor, TR1 etc. which effectively changed the title from my name + his name to my name + my girlfriend’s name. We have had a joint mortgage on the property since then.
We have rented the property out since we took his share of it, and it’s now worth around 230k. We intend to sell it soon.
To make matters slightly more complicated, I am a higher rate tax payer, wife is basic. Due to other investments neither of us will have our full CGT allowance this year although I don’t have precise figures to hand.
So... who pays CGT and on what value?! We both effectively took a share at different price points. In fact I sort of took half a share at one point then 25% at another! And in relation to the TR1 process, no “equity” was exchanged, so who decides what the property was actually worth at that time? Can all fees relating to the transfer deductible, and by whom?
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch