This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Brother sold father's house that was purchased on his name

gdrogo
Posts:5
Joined:Tue Sep 08, 2020 2:13 pm
Brother sold father's house that was purchased on his name

Postby gdrogo » Tue Oct 05, 2021 10:47 am

Hi, long ago father purchased an overseas vacation home which, for some purpose, he registered in the name of my older sister. After the death of my father, my sister, who also lives overseas, has sold the house and now wants to transfer me and my brother one third of the proceeds each. We all think this is fair, because father never intended the house as a gift to my sister nor he mentioned that in the will. But of course there is no evidence of the intent of my father. My question is: if my sister transfers the money to me, do I have to treat this income as a tax-free cash gift from her, or as selling a share of a property? There has been no substantial capital gain since sister inherited it, so I don't think it makes much of a different from a taxation perspective. Thanks in advance.

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

Re: Brother sold father's house that was purchased on his name

Postby Jholm » Tue Oct 05, 2021 11:00 am

Cash gift (tax-free) on the basis that you did not have a share in the property so the proceeds weren't taxable on you.

iwmtaxadvisor
Posts:45
Joined:Wed Sep 09, 2020 5:12 pm
Contact:

Re: Brother sold father's house that was purchased on his name

Postby iwmtaxadvisor » Tue Oct 05, 2021 11:12 am

I would analyse this differently to y gdrogo at least, initially. from a UK viewpoint, I would have said that on the facts presented the sister was holding the property with legal title with a beneficial interest of one third each to siblings. So I say "transfer as a sale of a property'.
I imagine since you don't mention it, you have considered any local taxes.
The way I understand the reporting rules is that the 30 day disclosure for sale of property do not apply for anything other than UK residential property (how long will that last?)
Robert Warren
Book a free meeting

gdrogo
Posts:5
Joined:Tue Sep 08, 2020 2:13 pm

Re: Brother sold father's house that was purchased on his name

Postby gdrogo » Tue Oct 05, 2021 11:50 am

Thank you both. Taxes have been taken care in the foreign country.

As long as the matter is not obviously settled one way or another, I'm inclined to go with the gift interpretation. However, I will write in the notes of the SA that sister gifted me money following the sale of a house [add details of the house] she had on her name but belonging to my father, which generated no capital gain.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Brother sold father's house that was purchased on his name

Postby maths » Tue Oct 05, 2021 10:26 pm

Normally, if sufficient digging is done some sort of evidence emerges which suggests what the intention of father was or was not.

However, if literally nothing emerges, under UK law the presumption of "advancement" as between father and daughter applies (subject to evidence to the contrary).This, if applicable, means that father's daughter owns the property as to 100%.


Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”