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Legal or beneficial ownership: It matters!

Shared from Tax Insider: Legal or beneficial ownership: It matters!
By Mark McLaughlin, March 2024

Mark McLaughlin looks at the distinction between assets which are legally or beneficially owned, and the implications for capital gains tax purposes. 

In most cases, assets are legally and beneficially owned by the same person (NB this article considers the law in England, Wales, and Northern Ireland). However, this is not always the case. 

Why does it matter? 

The distinction between legal and beneficial ownership can be important for tax purposes. For example, the capital gains tax (CGT) regime is generally concerned with property to which a person is ‘beneficially entitled’, as opposed to legal ownership.  

For example, if two individuals (A and B) are joint legal owners of a property, it does not automatically follow that A and B will both be liable to CGT on a chargeable gain from a subsequent disposal of the property, unless they are also joint

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