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.
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Here is what our tax experts are sharing with you in this month's magazine:
- Business Structures Part 1 - The Partnership
A partnership is one of the oldest and most basic of business entities. Partnerships are still governed by the 1890 Partnership Act, which defines a Partnership as... - Using Trusts to Minimise Property Capital Gains Tax (CGT)
The previous article in this series on Trusts ended with the tax planning suggestion for the rearrangement of investments. But doing so will not necessarily mean that there will be no tax due... - When Investments Go Bad! Claiming Relief
Buying property ‘off plan’ can be an attractive proposition. Developers often offer substantial discounts to those who are prepared to commit before the first brick has been laid, thereby providing the potential to make a significant gain by the time the property has been completed. However, unforeseen events may mean that even the best laid plans go awry. - Optimising Tax Relief – Capital Expenditure Part 4
This is the fourth and final article in a series looking at Capital Allowances tax reliefs for property businesses. In this article, we will look at the importance of elections when buying or selling a second hand property; how to make best use of... - 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
- Property Repairs before the First Letting – What is allowable?(April 2013)
- How to Pay off Your Main Residence Mortgage – And Claim Tax Relief!(March 2013)
- How to Grow a Property Portfolio Free of CGT!(February 2013)
- Have You Really Stopped Letting? (February 2013)
- Tax Planning - Timing is Everything!(January 2013)
- Jointly-Owned Let Property – Is There a Partnership?(December 2012)
- Living on the Job!(November 2012)
- HMRC’s Property Income Task Force (Part 1) – Anything to Declare?(November 2012)
- Private or Main Residence Relief – What You Need to Know!(October 2012)
- Capital Allowances: Second-Hand Fixtures(October 2012)
- Will I Pay Capital Gains Tax (CGT) on Gifted Flat?(September 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)
- 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 sell me our joint property below market value?(December 2009)
- Does the day of arrival count towards the 70 day rule?(December 2009)
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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