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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am selling a property which I have been letting out

Customer Question

I am selling a property which I have been letting out for the last 7 years. The mortgage is in my name only, but at the time of purchase my partner (since separated) contributed 50% of the investment i.e. half of the mortgage deposit and half of the cost of renovating the property so a deed of trust was drawn up stating that he will be entitled to half of the profit from selling the house. My question is who is liable for paying the capital gains tax bill once the house is sold?
As the mortgage is in my name do I need to pay the full amount before paying my ex partner his share of the profit or do we both pay our own CGT from our half of the profit?
Also is the allowance £11100 in this situation or less because of the Deed?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. If you look here, you will read that a deed of trust specifies the true ownership of a property regardless of whose name is ***** ***** title deeds. Therefore, you and your partner are equal owners of the property, ie 50:50, and should each disclose your respective shares of the gain to HMRC and pay the CGT based on your individual circumstances. You will each be entitled to the annual CGT exemption of £11,100. HMRC have been know to challenge a claim to ownership where the deed does not specifically state that each "part-owner" is in fact a part owner. If the wording of your deed says that your partner is entitled to half the profit, that does not necessarily means he is a part owner so you may need to have that looked at and amended. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 1 year ago.
Hi.I'm just following up to find out if my answer helped or if you have any further questions.