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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4422
Experience:  FCCA FCMA CGMA ACIS
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there, I currently own my home as joint tenants with

Customer Question

Hi there,
I currently own my home as joint tenants with my dad. I have done so for 8 years. He has never lived in my house or paid the mortgage. I understand that if I sell my house I will have to pay capital gains tax on my dads share of the profit as he has his own residential home. Am I able to change the ownership from joint tenants to tenants in common with myself owning 99% and my dad owning 1%. If I can do this how long will it take as I am looking to put my house on the market.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question. I have assumed that you have not paid your Father any rental for the use of the property.
Well, not quite: firstly, forget about the mortgage, that does not come into the equation. At present you are Joint Tenants each owning 50% of the house. As it is your sole or main domestic residence, you would be entitled to Private Residence Relief (PRR) which is at 100% of any gain made on disposal. Your Father, on sale, would not be entitled to PRR and have to meet the Capital Gains Tax on 50% of the overall gain made. You would have no liability for your father's taxation. He would have an Annual Exempt Amount of 11.1K to offset this gain and the remainder would be taxed at 18% or 28% or a combination of the two rates depending on his income including the gain in the tax year of sale.
You certainly could change the ownership to a tenancy in common as you suggest. However HMRC would deem that change a disposal and your Father effectively still be in the same position. As it stands at present you cannot even put the house on the market without your Father's consent.
I am so sorry to have to rain on your parade. Regrettably, for your Father, the scheme you suggest is a non starter.