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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a second property with a joint mortgage. It's not my

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I have a second property with a joint mortgage. It's not my primary residence but it is the primary residence of the joint mortgagee. If we were to pay off the mortgage and transfer the deeds solely to the other party would I be liable for CTG when the property is sold?
Submitted: 10 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 10 months ago.
Thank you for your question.You can payoff the mortgage..this has no bearing on capital gains tax.When you transfer your share to the joint mortgagee, it would trigger a capital gain on your share at the time of transfer and not when the property is eventually sold.Being a second home and not your primary residence, you would not escape CGT, I'm afraid. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 10 months ago.
Assuming I have half share, how is CTG calculated if the property is unsold? Do I have to pay CTG on half the profit whenever the property is sold?
Expert:  taxadvisor.uk replied 10 months ago.
Thank you for your reply.As far as you are concerned, by transferring your 50% share to the other party, you have effectively sold your share and your gain would be calculated based on the value of the property at the time of transfer. You would pay CGT on this gain at the time of transfer.The other party would use this figure as the cost of buying 50% share not previously owned. I hope this is helpful and answers your question.
Customer: replied 10 months ago.
The other party paid the deposit and pays the mortgage. I pay my share of the mortgage to him. It is a joint mortgage. I'm assuming my tax liability is 50% of any profits after sale. But does it have to be 50% or can we agree on a lesser amount between us?
Expert:  taxadvisor.uk replied 10 months ago.
Thank you for your reply.If you own 50% of the property then your share of the gain will be 50%. Your share is dependent on what agreement you have in place in terms of share of ownership.If there is no agreement in place you could agree on percentages between yourselves. I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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