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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13943
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am a part owner of a holiday house which is to be sold this

Resolved Question:

I am a part owner of a holiday house which is to be sold this year. The property is owned by 3 married couples. There will be a substantial amount of capital gains to be paid on its sale. Property in the UK is only allowed to have a max of 4 owners (land registry) so one person from each couple were put down as the owners when the property was registered. When the capital gain is payable, we obviously wish to use each person's capital gain allowance and income (18% v 28%) to minimise the tax to be paid. What proof, if any, would HMRC require to demonstrate proof of ownership between married couples in order to utilise the allowances?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax expert with vast HMRC experience.
I am afraid HMRC only look at the ownership regarding the deeds and if this could only list 3 of the individuals - rather than the six, then this is how HMRC will treat the capital gain too.
Its all to do with what details are held by land registry -
Even if the names owners make gifts of their half shares to their spouses, UNLESS this can be recognised by the land registry - then it has no bearing with HMRC.
The only way to ask HMRC to consider further is if there is evidence that each person (as an individual rather than a couple) placed a monetary investment into the initial purchase, or that there was a loan or mortgage to make the purchase in all six names, or each loan contained each couples name (where more than one loan) and said loans are shown to be for the purchase of this property.
Let me know if you have anything to back up this position, and I| can advise further. Or any bills for this property is any of the spouse (not noted on the title deed) or whether the rents have been declared for all six of you with HMRC
Or if you wish me to expand further
Thanks
Sam
Customer: replied 2 years ago.

Ok, thanks for your answer. When we registered the property because of the limitation of the max 4 owners, the names of the other owners were included in the land registration under Part B "Proprietorship register" which states that "No disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by .......(names of the other 3 owners).

Is this sufficient do you think to prove that they have an interest in the property?

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
I appreciate the dilemma with the registering and limits with just 4 names - but yes the fact you had the names listed in Part B - and I assume have declared the rents for all 6 of you, will allow all 6 to be considered as equal owners.
Let me know if you require any additional information - (If not then it would be appreciated if you could rate the level of service I have provided or click accept!)
Thanks
Sam
Customer: replied 2 years ago.

Ok thanks, ***** ***** Just a clarification in that it has been a holiday house for the sole use of us, it has not been rented out so there is no record of income. However, do you think the inclusion of the names in Part B is sufficient?

Thanks

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
That is fine - I just needed to be sure that, had their been rental income - that this has been divided up accordingly, but as only the six of you have used this property - then this does not need to be considered further.
Yes - the fact that you could not sell without the spouses permission shows an interest held within the property by them along with those officially named on the title deeds - and therefore you can divide up the gain as 1/6th for each (assuming there were shares held in equal amounts) and each benefit from the first £11,100 tax free (as this is the current annual exemption allowance) and then the remaining share of the gain liable to 18% or 28% tax (according to what unused basic rate band there is for each of you)
So all of you need to advise HMRC once the sale has taken place (if you do not already complete self assessment tax returns) so one can be issued to declare the gain (and all other income for that specific year)
Thanks
Sam
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