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Where Taxpayers and Advisers Meet

CFT on a property purchased for me

carlrigby
Posts: 1
Joined: Wed Feb 26, 2020 5:54 pm

CFT on a property purchased for me

Postby carlrigby » Wed Feb 26, 2020 6:05 pm

Hi all, I am divorced and my brother brought me a property last year to help me get back on my feet. We want to transfer the property to me now and thought he could gift it but now I am worried about CGT. I have been paying the mortgage the whole time I have been here and some people have said my brother should have signed a declaration of trust, which would negate CGT? I now also want to convert the loft, which will add at least 50k in value but I am worried about this now. Can someone please give me some pointers? I am getting lots of conflicting advice. What for example if he kept the property in his name and left it in his will for me, would CGT simply be replaced by INH tax? But then if I lived there for 7 years would I be exempt from INH tax?

I would really, really appreciate some advice :(

Thanks for reading.

jerome.lane
Posts: 192
Joined: Mon Aug 12, 2019 8:41 am
Location: Sandhurst, Berkshire
Contact:

Re: CFT on a property purchased for me

Postby jerome.lane » Thu Feb 27, 2020 11:56 am

How much has the property risen in value by? Who funded the deposit? If the arrangement is really that your brother has held legal title although you are the beneficial owner, then you can write to HMRC stating the facts and seeking their pre transaction approval that no CGT (or SDLT) arises on a transfer of legal title to you. If the property is to stay in your brothers name although you are really the beneficial owner, then you should draw up a declaration of Trust, albeit a little later than preferable.
Jerome Lane
Tax Adviser
Telephone: 07943 005902


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