Question: What is my capital gains tax position on the property sale?
My daughter and I owned a property bought for my daughter to live in and she lived there for ten years before we sold the property. The deposit was paid by me. I received no income. When we sold the property we split the selling value 50:50 between me and my daughter. What is the capital gains tax (CGT) implication for me?
Arthur Weller replies:
Answer: CGT is dependent on beneficial ownership. See HMRC’s Capital Gains manual at https://.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg70230. Since you paid the deposit, and you received half the sales proceeds, this would indicate that you had half the beneficial ownership, and consequently you should be liable to CGT on half the gain. But since your daughter was the only one who lived in the property, this would suggest that she was the sole beneficial owner. In your scenario, I do not know whether you were the sole legal owner, or your daughter, or both of you were joint legal owners. I think you should seek specific tax advice.