How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15839
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

Brother wants to buy myself and sister out of jointly owned

Resolved Question:

Brother wants to buy myself and sister out of jointly owned business. We were gifted this property 4 years ago by mother following death of our father. It was let out until June this year when brother took over.The original valuation (4 years ago)was approx £240,000. It will have increased in value as brother has done a total refurb. My sister and I have not contributed to refurb and are happy with1/3 of original valuation. Will we be liable for any costs/taxes etc. or is it a simple case of us signing deeds over and him giving us £80,000 each.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. You mention a "jointly owned business" then you mention a property. What exactly do you own a share of?
Customer: replied 1 year ago.
Sorry, it is a trading pub/restaurant with owners accomodation.
Expert:  TonyTax replied 1 year ago.
Thanks.
If I can just recap. Am I correct in assuming that the pub/restaurant was let to somebody who ran it as their own business from when you inherited it until June 2015 when your brother started to run it himself and that you and your sister have never had any involvement in running the business? Is the property owned by you all personally or by a limited company in which you each own shares?
Customer: replied 1 year ago.
Yes those details are correct. We own it jointly but are not a limited company.
Expert:  TonyTax replied 1 year ago.
Thanks.
Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 1 year ago.
Hi.
As you and your sister are connected for tax purposes to your brother, any disposal by you and sister to him will be deemed to have taken place at the open market value of your respective shares in the property regardless of the agreement you may reach with your brother.
Unfortunately, as this property has only been held as an investment by the three of you, at least until June 2015 by your brother, there are no reliefs available to you and your sister other than the annual Capital Gains Tax exemption for the first £11,100 of gains you make in the current tax year.
Were you to be actively involved in running the business for at least a year up to the disposal, you could lodge a claim for entrepreneurs' relief which might restrict the CGT charge to 10% as opposed to one of or a combination of the regular rates of 18% or 28% depending on the level of your income. You can read about entrepreneurs' relief here:
https://www.gov.uk/government/publications/entrepreneurs-relief-hs275-self-assessment-helpsheet/hs275-entrepreneurs-relief-2015
I hope this clarifies your situation but let me know if you have any further questions.
Customer: replied 1 year ago.
Thank you but can you please just clarify-
does this mean my sister and I would be liable for CGT on £80,000 minus £11,100
Expert:  TonyTax replied 1 year ago.
Your cost for CGT purposes will be £80,000 (£240,000 / 3). Your deemed sale proceeds will be one-third of the value of the property now. The difference between those two figures will be the gain and you take £11,100 off that to arrive at your net taxable gain.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15839
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
thank you so much. this has made things much clearer.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.