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JGM, Solicitor
Category: Law
Satisfied Customers: 12195
Experience:  30 years as a practising solicitor.
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My brother and I are 50/50 owners of a family holiday cottage

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My brother and I are 50/50 owners of a family holiday cottage that we inherited piecemeal from our Father & 2 maiden aunts between 17 & 20 years ago.

I am intending to sell my half share to my Brother's daughter for £70,000 because I have Parkinson's Disease and can no longer use the cottage. The market value of my half is probably about £90,000.

Do I have a Capital Gains Tax liability and, if so, how is it calculated, please?
Thank you for your question.

The CGT liability is calculated on the difference in value between your share at present and your share when you acquired the property. From that amount is deducted your personal allowance for the current tax year and any other allowances, such as capital sums spent on the property over the period. The balance is taxed at 18% if you are a basic rate tax payer and at 28%?if you are a higher rate tax payer.


If your share was worth £30000 when go acquired it and you sell it for £70000. There is a gross profit of £40000. Say you spent £10000 on improvements. That reduces the figure to £30000. You deduct your CGT personal allowance of £10900 which means you are paying tax at either 18% or 28% of £19,100.

I hope that helps.

Please leave a positive response so that I am credited for my time.
Customer: replied 3 years ago.

Thanks. I understand the general idea but, as I have had no capital gains of any sort in the intervening years, is there any way that the CGT personal allowance for those years can be used to reduce or even eliminate the tax charge this year?

No, the allowance can only be used in the year of disposal. You can't save them up.

If you are married you could transfer your share into the joint names of you and your spouse immediately before the sale to your niece and that would mean you could use both your personal allowances essentially doubling the £10900 to £21800.
Customer: replied 3 years ago.

If that is allowable then it will certainly have been worthwhile contacting you!


I assume my Brother would need to agree to the transfer but that should not be a problem.


Is there a Land Registry or some other form that we can use to make the transfer to my husband & myself which will satisfy the Inland Revenue?


You have to grant a Disposition in favour of your wife and yourself and then you and your wife grant a Disposition to your niece. There is no form. Your solicitor will draft the deeds as part of the sale transaction. The SDLT form which your niece's solicitor submits to HMRC will reflect the fact that the grantors of the deed were you and your wife. You and your wife will declare the transaction on each of your tax return forms for the relevant tax year and each of you can claim the personal CGT allowance.

If you haven't had to do a tax return before you should contact HMRC and ask them to register you for self assessment so that a return is issued to you.
JGM and other Law Specialists are ready to help you
Customer: replied 3 years ago.


Am I allowed to ask a supplementary question, please?


If so, it is this :- if in addition to me transferring half of my share to my husband is it allowable for us both to then sell a half of our quarter shares to my niece in 2014/15 and then sell the second half to her in 2015/16 and thereby be entitled to 4 annual allowances to set against the total capital gain?


Many thanks,



Yes, there is no reason why not.