I bought a one-third share in a property with my brother in 2007. We are now considering selling it. He resided in the property, whilst I regarded it as an investment. The purchase price in 2007 was £143,200, and it is valued today at about £150,000. We reside in Scotland, and I am a basic rate taxpayer. I don't think capital gains tax (CGT) will be due but what are the rules around reporting it via self-assessment? Are there any other tax implications for myself if we do sell?
Arthur Weller replies:
According to your figures the total gain on the property is £7,000, so your one-third share of this is £2,333. Every individual has a CGT annual exemption (AE) (i.e. £12,000 for 2019/20). If you haven't used your AE elsewhere, you will have no CGT to pay. However, since the sale proceeds of your one-third share are £50,000, you have to report it on the self-assessment tax return because whenever the taxpayer's sale proceeds are more than four times the AE, it must be reported on the tax return, even if there is no CGT to pay (due to the AE, or some other reason).
This question was first printed in Tax Insider in August 2019.