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Joshua, Lawyer
Category: Property Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I own half a property I have never lived in. My sister owns

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I own half a property I have never lived in. My sister owns the other half and it is her primary address. Can I transfer my share into her name so when we sell there will I won't have CGT. How long after transfer can we sell. How do we do this?

Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.

  1. May I ask when you bought the property approximately and the then and current value (approximate figures are fine for this purpose).
  2. Do you propose to gift the your share to your sister or sell it?
  3. Is there a mortgage on the property?
Customer: replied 7 months ago.
Approx value 350,000 owned by both since around 2003. Transfer my name to hers and then sell during this tax year. No mortgage. We are both PAYE

Thank you - do you know the price when you purchased the property?

Customer: replied 7 months ago.
This was an inheritance. It was originally bought in the 90s by grandmother for around 50,000

Thank you. The position then is that you will take the property at the market value it was valued at at the time of your grandmothers passing. It would have been valued for probate purposes at that time and if you do not have a record of the valuation, you can either contact the person or solicitors that handled the administration for a copy of the estate return to confirm the valuation. If this can not be located, then a new historical valuation will need to be obtained from a local estate agent that has a qualified surveyor working for it - most larger agents do. Your gain is the difference between the market value when you inherited and the value when you eventually come to sell.

Your sister will not pay CGT but if the gain is more than your annual allowance which is £11,300 then you will pay CGT on any gain over this sum. Note that if you have any losses from previous years, you can carry these forward and use them to offset any tax.

In terms of your proposal, you can gift or sell your sister your share however if you gift it , it is still treated as being transferred at market value and tax will be due in the same way so this will not assist. What you can do however is git or sell your sister shares in the property each tax year so as not to exceed your allowance. So for example let us say that the property is worth £200,000 and was £100,000 when you acquired it. The gain is £100K ad your share is £50K. If you transferred your whole share now, you would pay tax on £38,700 gain (being the gain less your allowance.

However is you transferred your share to your sister in £22,600 tranches each tax year then the amount transferred would be within your annual allowance and no tax would be due. Depending upon the amount of gain you may be able to do this over anywhere between 1 and 3 years most likely epending on how much the property has increased in value. Youmay wish to retain an accountant to work out the amount you can transfer once you have the above valuations if you are not certain of the figures.

Does the above answer all your questions? If it does, I should be very grateful if you would kindly take a moment to click a rating for my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer: replied 7 months ago.
My sister has always lived in the house even before inheritance

I apologise for the delay in reverting to you - I had to take a long phone call. From what you say your sisters share will not be subject to CGT as she will have primary residence exemption. It will only be your share which you can consider transferring in tranches to your sister so as not to exceed your annual allowance as above.

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer: replied 7 months ago.
Sorry for going on. The Land Registry has a Transfer of Ownership form online. I'm guessing it's not as simple as just filling out this form

If you wanted to transfer your whole title it is that simple though you then need to register the transfer which requires several more forms but if the gain on the property is more than £22,600 when you purchased it overall, then this would immediately trigger a tax charge for CGT so it would not be wise.

If the gain exceeds the above figure, which you will confirm by obtaining past and present valuations from a local estate agent, then you will likely be better to execute 2 or more bare trust deeds to transfer your ownership in stages so as not to exceed your allowance. Most people will retain a local accountant to help them calculate and arrange the transfers - accountants are well used to dealing with such arrangements and they can make sure for a relatively modest fee that you do not end up paying unnecessary CGT. However it may not be possible to sell the house this tax year and avoid tax if the gain exceeds £22,600; you may have to wait until after next April at least to sell when you get new allowance to use. it all depends on the amount of the property gain.

Have I been able to answer all your questions on the above?

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