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Where Taxpayers and Advisers Meet

CGT implications for ownership percentage adjustment on residential home?

Radge70
Posts:11
Joined:Sat Mar 03, 2018 12:41 pm
CGT implications for ownership percentage adjustment on residential home?

Postby Radge70 » Wed May 04, 2022 12:39 pm

My partner and I purchased our residential home for £400,000 4 years ago and registered it with a 70/30 split in my favour due to me being able to pay more than her at the time. We now want to make the split 50/50 based on the same £400,000 purchase price. E.g at the time I paid £280k and she paid £120K (70/30) so she will now give me £80K to make it 50/50 (making it £200k paid by each of us over the piece)
Our solicitor will update the land registry to reflect the new ownership split but my accountant seemed to think this would have CGT implications. I’m surprised by this as it’s the home we live in and it’s all being done based on the original purchase price of £400,000.
Is it correct that there are CGT implications? Also, are there any other tax implications that anyone can think off in this scenario?

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT implications for ownership percentage adjustment on residential home?

Postby Jholm » Wed May 04, 2022 1:58 pm

Are there CGT implications?

If you're married, no.
If you aren't, yes.

Another potential issue could be stamp duty implications if either a mortgage debt is being transferred also, or consideration changes hands. I imagine these values would be below the threshold though.

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT implications for ownership percentage adjustment on residential home?

Postby Jholm » Wed May 04, 2022 2:01 pm

Also, if you've lived in it throughout and the property is entirely residential, it would be covered in full by PPR relief so even if unmarried, no apparent issues.

These are tax basics. Not one to slate another professional but they don't sound particularly competent. Then again, accountants generally have good tax knowledge but many aren't tax experts.

Radge70
Posts:11
Joined:Sat Mar 03, 2018 12:41 pm

Re: CGT implications for ownership percentage adjustment on residential home?

Postby Radge70 » Wed May 04, 2022 2:41 pm

Thanks for your replies Jholm, that's appreciated. We have additional joint property (in a Limited company) so our accountant may be getting confused.
For the property I am asking about though, yes we have lived in it together throughout (unmarried and in sin!). I am assuming the (joint) mortgage can just be left as it is? The idea being that we are 50/50 liable for that so we have used half of the outstanding mortgage balance to calculate how much each of us paid when calculating the ownership split. The solicitor is basically just saying that they will update the Land Registry (Scotland) to show a 50/50 split in the ownership so I'm assuming no stamp duty implications? We paid LBBT which included the additional dwelling supplement when we first purchased the house.

I assume from what you say though that all of this will need to be accounted for in our self assessments, even if there is no tax due?


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