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Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
from what you say, do I understand that you are the sole owner of both adjoining properties? if this is correct, could you clarify a little more what you mean by transferring your ownership of one of the properties to your portion of the other please?
thank you. could you give me a little more information about exactly what it is you are proposing to do? Are you proposing to buy a larger share from another party in one of the properties for cash or by way of some form of swap?
thank you. So you would propose to effectively offer your share of one of the properties to a third party in return for that third-party transferring some or all of their share in the other property to you. Is that the arrangement?
Thanks. Finally do you live in the property you are wishing to give up your share in or the one you are wishing to increase our share in as your main home? Does your mother live in the other?
Thanks. This is treated as a disposal and acquisition for CGT purposes. You are acquiring your mothers share in your property and she is acquiring your share in her property. Because you are each treated as selling your respective shares in each others property for the value of the share you acquire in the others, there may be CGT payable depending upon the amount you paid for respective shares and the value of the share you are respectively giving up.
If there has been a gain, you may be able to reduce or avoid that gain by making an "election" of your principle private residence relief in respect of each others properties temporarily. This could potentially reduce the gain for the last three years of ownership.
From there you can of course also apply your respective allowances of £10,900 to any gain and any costs associated with acquisition and disposition. In addition if you have made any improvements to your respective properties this can also be deducted from the gain.
Depending upon the figures in question, the above techniques may be able to significantly reduce any gain or avoid paying tax altogether.
An accountant can prepare a CGT computation for you for a relatively modest fee.
Is there anything above I can clarify for you any further?
A pleasure. If I can assist any further as the situation develops please do no hesitate to let me know.
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