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bigduckontax
bigduckontax, Accountant
Category: Tax
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I and 2 other persons contributed towards the purchase of a

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I and 2 other persons contributed towards the purchase of a property. I have not resided in this property but the other 2 co-owners have. We have a Trust Deed with states that on the sale of this property I would get the return of my initial deposit only without interest and the remainder of the net proceeds would be divided equally between the other 2 co-owners. Am I liable for Capital Gains Tax even though I do not make any gain on my initial deposit.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. You say this property is in Trust. If that is the case then the Trust is liable for any Capital Gains Tax (CGT) due on disposal of the property and any distribution, which cannot be made until any CGT is due has been settled by the Trust, comes to you tax free. You do not make any gain, the Trust does. I do hope that my reply has been of assistance.
Customer: replied 1 year ago.
We have a Declaration of Trust which states that I only receive my initial deposit without interest and the other 2 co-owners receive the remainder of the net sale proceeds. This is a residential property. I therefore stand to gain nothing only the return of my deposit. As I will make no gain do I have to pay capital gains tax. I have not worked for the past 2 years.
Expert:  bigduckontax replied 1 year ago.
It is the Trust which is taxed not you. If you make no gain then there is no CGT due. There is nothing to declare on your self assessment.
Customer: replied 1 year ago.
There is no Trust, the property was purchased as tenants in common with unequal shares. We have a Declaration of Trust between the 3 co-owners. This was drawn up to protect my deposit so that on the sale of the property my deposit would be returned to me without interest. The other 2 co-owners wish to purchase another property now. Am I correct that when my deposit is returned to me on the sale of the property I do not have to pay CGT.
Expert:  bigduckontax replied 1 year ago.
I am so sorry, but the answer remains the same. You have no gain so there is nothing to declare and no CGT due.
Customer: replied 1 year ago.
Thank you Keith, I appreciate the advice given.
Expert:  bigduckontax replied 1 year ago.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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