Would she pay any tax if the property was given to her?
After a marriage breakup 37 years ago, Pauline was left homeless with three children. Her brother stepped in and bought her a three bed terraced property in Liverpool for her to live in. Although he owns the property he always said it was hers. She obviously has paid no rent as the house is hers. He has since moved to Australia where he lives permanently. He now wants to transfer ownership to Pauline to formalise the agreement he made when he bought the property. Are there any UK tax implications for Pauline?
Arthur Weller replies:
Answer: If you look at HMRC’s internal manual on capital gains tax at www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg70230 it implies that Pauline always had beneficial ownership of the property (she occupied it). So now it is simply the legal ownership that is being transferred from her brother to her. You will see (at CG12704 and CG10720) that he does not pay any UK capital gains tax. Since the transfer now is being made presumably for no consideration, there is no stamp duty land tax for Pauline to pay.