Hello and welcome to the site. Thank you for your questionPlease clarify for me ..Is the property currently in your names (you and your brother) as recorded at Land Registy or is it held in trust?I don't follow your point ....Does the estate have its own CGT allowance still?
Are you basic rate or higher rate tax payers?
Sorry there was a typo in the above.
I meant to say "the registered title to the property is still in my mother's name".
As for the estate's CGT allowance, which I would have thought is reasonably clear, does an estate have an allowance in the same way an individual does? In other words if the gain remains entirely within the estate and is £100k, can £11k of that be taken out of account?
Assume that I am a higher rate tax payer, that my wife has a fairly low income, and that my brother and his wife have taxable incomes of 40k and 25k, though if you think this is now getting too far into specific tax avoidance advice for the purposes of this site, I will understand.
I hope this is helpful and answers your question.
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Thanks for that I am a little concerned though that you suggest making the transfer to the family members in the same year as sale might attract an HMRC enquiry. It is either lawful, in which case we should have no concern about an enquiry, or unlawful in which case it is not.
Is there a difference in nature between a transfer to my brother and me than to spouses? Can we transfer to all four of us, which would probably be the most tax efficient way to use the allowances, if it is lawful, wouldn't it?
Richard, thank you for your reply.What I am suggesting is lawful...it is common practice to have a time lag between transfer/sale of assets to spouse and then eventual disposal. The rationale is that transfers between spouses are tax neutral and there is no CGT implications on transfer. The recipient acquires it at the original cost and CGT is deferred.HMRC don't like it because it mitigates tax payable.You can transfer your share to your wife just before disposal, if you so wish.You stated you inherited the property around four years ago. At the time of death you and your brother were to inherit it. You could have made a deed of variation to enable transfer to all four. There is a time limit to exercise/execute a deed of variation and this time limit is two year from date of death.
You may find information on deeds of variation heplful .. look at this link
I hope this is helpful.