In January 2021, my ex-partner's name was removed from the joint rental property deed. No money was involved as in return I removed my name from our family home. We declared it to HMRC and my partner will have to pay a chunk of capital gains tax (CGT). I have now decided to sell the property (now in my sole name). What purchase date should I note on the CGT form: the initial date and price when it was purchased jointly, or the value at January 2021, when I became the sole owner (although there was no sale between us, just an exchange between properties)?
Arthur Weller replies:
You are really making two sales. One half of the property was acquired some years ago for one half of the purchase price for the whole house. The other half of the house was acquired in January 2021, for whatever was the market value then of half the house. Although referring to spouses, it is relevant to look at HMRC's Capital Gains Manual (see tinyurl.com/229vbhac), where it states: “TCGA92/S17 (1)(a) goes on to provide that where a transaction takes place, which is otherwise than by way of a bargain made at arm’s length, the consideration for the disposal of the asset is deemed to be equal to the market value of that asset at the date of disposal.”