Tax Insider is a new venture from TaxationWeb, the UK's leading independent tax portal.
Each month our tax experts reveal tax strategies to help minimise your property taxes.
Click here to see the tax strategies you'll receive.
Here is what our tax experts are sharing with you in this month's magazine:
- No CGT on BTL Properties?
A popular piece of tax planning for buy-to-let investors is to move into a property and live in it for a few months before selling it, thus attracting the exemption from CGT for a “main residence” for the last three years of ownership, together with the.... - Trader or Investor - Why it Matters
Which would you prefer - a capital gains tax bill of 18% or an income tax and national insurance contributions bill of 29% or 42% (or possibly even 52%) on the profit made on the sale of a property? The choice can be yours but planning... - More Than One Home – Which One Is Your Main Residence?
At first sight, this may seem something of a straightforward question. If you have more than one home, logic would suggest that this is the property at which you spend the majority of your time. However, as far as the main residence exemption for capital gains tax (CGT) purposes is concerned, this... - Buyer Beware! Government Crackdown on High Value Property and Property Tax Avoidance
In his 2012 Budget Speech on 21 March, the Chancellor set out a number of measures designed to combat perceived abuse of the tax rules in relation to properties. Just in case you lost them amongst the headlines about “granny tax” and “pasty tax”, they cover... - Tax Insider: Tax Tips
- Tax Insider: Your Property Tax Questions Answered by Arthur Weller
I wholeheartedly recommend the ‘Tax Insider’ to anyone who is interested in legitimately minimising their tax bill.
Dr Bennie Mallett, General Practitioner
Its sole purpose is to help you to legitimately avoid or minimise your property income tax, capital gains tax, inheritance tax etc.
This monthly magazine will particularly benefit the following:
- Landlords with properties in the UK
- Property investors who hold property overseas
- UK and international property developers
- Accountants or tax advisors who have property clients
- Financial advisors
- What Expenses Can I Claim?(May 2012)
- Claiming Travel Costs in Property Rental Businesses(May 2012)
- Use it or Lose it! Flat Conversion Allowance(April 2012)
- 100% Tax Relief - Renovation Allowance(April 2012)
- New for Old! The End of the Renewals Allowance(March 2012)
- Interest Tax Relief And The ‘Buy To Let Portfolio’(March 2012)
- Three Homes Are Where the Heart Is! More Insights Into What Makes A ’Main Residence’(February 2012)
- Renewable Energy and Tax (Part 2) – Business Tax(January 2012)
- Solar Power for Property Owners (Part 1)(December 2011)
- Tenant Deposits: Traps & Tips(November 2011)
- How Does HMRC Know When a Property Has Been Sold?(October 2011)
- Can I Sell My Property Back to Myself?(October 2011)
- What Tax Will My Father Pay on Property Gifted to My Mother?(September 2011)
- How Do I Account for Rent in Advance?(September 2011)
- Do I Pay Tax on Rent Received from Family?(September 2011)
- Will I Pay Capital Gains Tax (CGT) on Gifted Flat?(September 2011)
- Can I Receive Gross Rental Income from Property Agent?(September 2011)
- Can My Brother ‘Gift’ Me a Share of a Property in His Name?(September 2011)
- Can Our Property Business Hire My Self-Employed Partner?(August 2010)
- Can I Claim Mortgage Relief for the Period of Trying to Sell My Property?(July 2010)
Can My Brother ‘Gift’ Me a Share of a Property in His Name?
I am based in the UK and live in my brother's property (flat). He lives abroad. We have a family understanding that we own 50% each. I have been led to understand that he is able to ‘gift’ me 50% of the property with no tax implication on either of us. Is that correct?
If so, how do I go about it as I would then like to take over the property, which I assume will mean refinancing? If I chose to buy out the balance of the flat from my brother is there any tax implication on either of us?
Arthur Weller Replies:
For two reasons there are no tax implications on either of you if he ‘gifts’ to you 50% of the property. If your 'family understanding' means that you actually own 50% of the beneficial ownership of the property, even though the property is legal entirely in his name, then putting your name on the legal documents, making you a joint legal owner, has no tax consequences. This is because tax is only concerned with the beneficial ownership, and by transferring half of the legal ownership nothing has happened in tax terms.
If your 'family understanding' means that you do not actually own 50% of the beneficial ownership of the property, then when he ‘gifts’ to you 50% of the property something is happening for tax purposes.
However there should be no tax implications on either of you since he is non UK resident and not subject to UK capital gains tax. And since it is a gift for no consideration - there is no stamp duty land tax on you.
Your brother can gift 50% of the property to you, in the first scenario above, just by instructing your solicitor to get the legal documents changed into the joint names of both you and your brother. In the second scenario above, your brother can either do a formal conveyance or write a deed of trust, ensuring that you have 50% of the beneficial ownership of the property.
If you choose to buy out the balance of the flat from your brother then again there should be no UK capital gains tax for your brother since he is non-UK resident but there may be stamp duty land tax on you - depending on the price you pay him.
- Private Residence Relief and Working From Home(June 2010)
- Stamp Duty Land Tax Tip(May 2010)
- Reclaiming Your Class Four NIC(April 2010)
- Tax Return Help Sheet for Negligible Value Claims(March 2010)
- How to Qualify for Furnished Holiday Accommodation Relief(January 2010)
- HMRC(December 2009)
- Review Your Position In 2014(December 2009)
- You Can Create a Tax Loss By Knocking a Building Down(November 2009)
- Renovations and alterations(October 2008)
- Do you have two properties that could be your main residence?(May 2008)
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- Written by UK leading and practising tax experts
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