selling hmy house CGT on a none resident

[technomate20122]

My blood pressure is too high!! I dont understand nothing about this things not sure who the benefiacial owner is ! i bought the house and added my father ( a retired man ) to the deeds becouse my broker years ago told me that it will be most accepteble to the lender to aprove the applciation, never knen the implications of this up to now. The tax man ask me who the benefial owner is and I told him that my father and I are the legal owners and that he has never had any interest on the property neithar has colaborate financially with the property he is too old to travel and most luckily he will die soon no very stress about it. The tax man then told me that will call the solicitor hopefully i can find some light soon
thanks again

[technomate20122]

I refer you again to this:

CGT is charged on the beneficial owner, not the legal owner.

You father has no beneficial interest. That is documented. It could be documented on the back of a fag packet, it doesn’t need “registered” anywhere.

The property is held in your joint names for your sole benefit. As long as that is confirmed in writing you are good to go.

My blood pressure is too high!! I dont understand nothing about this things not sure who the benefiacial owner is ! i bought the house and added my father ( a retired man ) to the deeds becouse my broker years ago told me that it will be most accepteble to the lender to aprove the applciation, never knen the implications of this up to now. The tax man ask me who the benefial owner is and I told him that my father and I are the legal owners and that he has never had any interest on the property neithar has colaborate financially with the property he is too old to travel and most luckily he will die soon no very stress about it. The tax man then told me that will call the solicitor hopefully i can find some light soon
thanks again

[someone]

You're approaching this the wrong way.

Question 1: What was your intention when the property was put into joint names. From what you've said it was to be held in joint names for your sole benefit. That is a fact although only you and your father know this for certain.

Question 2: What is the actual position with regards to holding the property. You can ask a solicitor to help with this, it's not a tax question at all. There's not actually all that much information held at HMLR but whether it's held as Tenants in Common or Joint Tenants will be recorded. It *should* be Tenants in Common. If it's not then, based on Q1 that is a *MISTAKE* that should be corrected. Severing a Joint Tenancy is very simple, you can DIY it - https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common

Question 3: Assuming Q2 was already TiC, is there any existing documentation showing that the property is held for your sole benefit? This does not need to be a formal document, emails, letters are all OK. You will find references to "Declaration of Trust" online and that is the most formal way of documenting the beneficial ownership but it's not required.

Question 4: Assuming Q3 was JT, what existing documentation do you have showing that you intended this property to be for your sole benefit. This can be things like emails/letters when you got the mortgage. What you're trying to do here is collect evidence that JT was a mistake. One piece of evidence is who paid the mortgage, who paid for maintenance etc. If your father had nothing at all to do with the property other than his name on the deeds then that is evidence of 100% beneficial ownership to you. Even if there's zero evidence, that doesn't stop it being JT being a mistake but it does make it harder for you if HMRC decide to challenge who pays CGT and when.

Finally, once all the above are answered to the best of your ability (and they're all legal questions, not tax questions), you should rectify any mistakes and ensure that the ownership is documented. Note that you cannot backdate that documentation but you can say something like: "Date: 11th June 2024. This is to document that since <Date> the property at <Address> was for the sole benefit of <name>".

I'm guessing, but I suspect your broker back when you got your mortgage wasn't completely honest either with you or with the mortgage company. It has recently become more common but historically most would refuse to lend to borrowers who weren't living at the property (and it sounds like your father never lived there). It sounds like the mortgage is now paid off, so the mortgage company won't care now even if they would have objected at the time. But your Broker might have encouraged you to do the paperwork in a way that made it look like your father was living there, and wanted your conveyancing solicitor to think that too.

It should be possible to sort all this out - but you will need a solicitor familiar with England and Wales (I'm assuming) property ownership.

=================
I've been glossing over this bit because I don't understand it:

"declaration of solvency was made with the Hague Apostille" This doesn't make any sense (Assuming it's a E&W law and not some foreign law). This is used when gifting something of value - but this entire thread seems to be based on the fact that your father never had a beneficial interest and so had nothing of value to give. When was this declaration made? If it was back when you took out the mortgage then although it doesn't make sense to me, it might be the evidence you need that your father never had a beneficial interest in the property. If it was made recently then it seems to be evidence of the opposite, your father did have a beneficial interest and it's now being transferred to you for zero consideration - that is a CGT event and your father will fall under the NRCGT regime.

https://www.samconveyancing.co.uk/news/conveyancing/declaration-of-solvency-when-gifting-your-house-10026

[technomate20122]

You're approaching this the wrong way.

THANK YOU VERY MUCH FOR ALL THE EFFORT IN PREPARING THIS RESPONSE IT IS OF A LOT OF VALUE TO ME, I WAS WAITING FOR A RESPONSE FROM THE PERSON WHO COULD PREPARE THE ACCOUNTING TAX BUT HE MUST BE VERY BUSY . I NEED TO FIND A TAX SPECIALIST (HAPPY TO PAY ) WHO CAN CLARIFY ALL THESE ADVICES ANY RECOMENDATIONS PLEASE?

Question 1: What was your intention when the property was put into joint names. From what you've said it was to be held in joint names for your sole benefit. That is a fact although only you and your father know this for certain.

Question 2: What is the actual position with regards to holding the property. You can ask a solicitor to help with this, it's not a tax question at all. There's not actually all that much information held at HMLR but whether it's held as Tenants in Common or Joint Tenants will be recorded. It *should* be Tenants in Common. If it's not then, based on Q1 that is a *MISTAKE* that should be corrected. Severing a Joint Tenancy is very simple, you can DIY it - https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common

Question 3: Assuming Q2 was already TiC, is there any existing documentation showing that the property is held for your sole benefit? This does not need to be a formal document, emails, letters are all OK. You will find references to "Declaration of Trust" online and that is the most formal way of documenting the beneficial ownership but it's not required.

Question 4: Assuming Q3 was JT, what existing documentation do you have showing that you intended this property to be for your sole benefit. This can be things like emails/letters when you got the mortgage. What you're trying to do here is collect evidence that JT was a mistake. One piece of evidence is who paid the mortgage, who paid for maintenance etc. If your father had nothing at all to do with the property other than his name on the deeds then that is evidence of 100% beneficial ownership to you. Even if there's zero evidence, that doesn't stop it being JT being a mistake but it does make it harder for you if HMRC decide to challenge who pays CGT and when.

Finally, once all the above are answered to the best of your ability (and they're all legal questions, not tax questions), you should rectify any mistakes and ensure that the ownership is documented. Note that you cannot backdate that documentation but you can say something like: "Date: 11th June 2024. This is to document that since <Date> the property at <Address> was for the sole benefit of <name>".

I'm guessing, but I suspect your broker back when you got your mortgage wasn't completely honest either with you or with the mortgage company. It has recently become more common but historically most would refuse to lend to borrowers who weren't living at the property (and it sounds like your father never lived there). It sounds like the mortgage is now paid off, so the mortgage company won't care now even if they would have objected at the time. But your Broker might have encouraged you to do the paperwork in a way that made it look like your father was living there, and wanted your conveyancing solicitor to think that too.

It should be possible to sort all this out - but you will need a solicitor familiar with England and Wales (I'm assuming) property ownership.

=================
I've been glossing over this bit because I don't understand it:

"declaration of solvency was made with the Hague Apostille" This doesn't make any sense (Assuming it's a E&W law and not some foreign law). This is used when gifting something of value - but this entire thread seems to be based on the fact that your father never had a beneficial interest and so had nothing of value to give. When was this declaration made? If it was back when you took out the mortgage then although it doesn't make sense to me, it might be the evidence you need that your father never had a beneficial interest in the property. If it was made recently then it seems to be evidence of the opposite, your father did have a beneficial interest and it's now being transferred to you for zero consideration - that is a CGT event and your father will fall under the NRCGT regime.

https://www.samconveyancing.co.uk/news/conveyancing/declaration-of-solvency-when-gifting-your-house-10026