I have a number of queries along the same line at present and have sought clarity from HMRC to no avail. I am looking for the correct acquisition cost in the following example:
Mr A purchases a property for £90,000 in joint names with Miss B in the year 2000. Incidental costs of acquisition total £2,000. There is no marriage or civil partnership and no other reason that they would be connected parties for CGT. There is a 75% mortgage on the property which Mr A pays the majority of.
The relationship ends 5 years later and Miss B agrees to accept £5,000 for her share in the property in 2005 as she recognises that she did not contribute as much to the mortgage and the market value of the property has risen to £120,000.
Mr A then lives in the property until 2010 and lets the property until the current day, when he then sells the property for £200,000. Incidental costs of sale are £5,000.
What is the correct treatment for the CGT Computation for Mr A please? I have my thoughts and two separate HMRC advisors have 2 different thoughts, giving 3 opinions in total.
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