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JGM, Solicitor
Category: Scots Law
Satisfied Customers: 12183
Experience:  30 years as a practising solicitor.
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Law & tax, , my two sisters and I have inherited my

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Law & tax,
Hello, my two sisters and I have inherited my fathers house, we have rented it out for the last three years, its in poor condition and my sisters now want to gift me their share of the property. They both live in Gibraltar, one is a tax payer and the other is retired, I am a UK tax payer. I need advice as to whether this can be done, is there any tax implications in doing so, does the property need to be valued if no money is being exchanged and what procedure should be followed so no one can back out some years down the line. One of my sisters will be getting divorced soon, does this have any bearing.
Regards, ***** *****
If the property hasn't gone up substantially in value since you inherited it there should be no capital gains tax issues. Because no money is changing hands there should be no Land and Buildings Transaction Tax or Additional Dwelling Supplement due either. So no valuation should be necessary. The procedure to be followed is that you and your sisters would grant you a title deed which would be registered in the Land Register of Scotland and on registration, would be conclusive as to your sole ownership. You will need to see a solicitor for this. Whether your sister gifting you the house and then divorcing has a bearing on her divorce is presumably a matter of law for her in Gibraltar and has no relevance to you in Scotland. Happy to discuss further. I hope that helps . Please leave a positive rating so that I am credited for my time.
Customer: replied 2 years ago.
Thank you for your reply, you have been most helpful, may I ask some further points. As there would be no money changing hands due to the gifting of the property is this fact written into the title deeds, or is the title transferred just with no mention of payment. You point out that there would be no building transaction tax, I assume this is the stamp duty, is this because there is no figure to work on, that would be a relief but I never imagined that would stop them demanding the stamp duty tax regardless. I mentioned my sisters divorce from the point of her husband possible having a claim on this property due to it being a marital asset, am I correct in understanding that even though the property is in Scotland her estate it is where she resides that the law would apply.
Regards, Alan
The title is granted, not for a price, but for "love, favour and affection" and that is what is specified in the Disposition of the property. No LBTT is paid on a transfer like this where the consideration is nil. You may be liable to Additional Dwelling Supplement if you own another house but the Revenue Scotland guidelines are not clear on this at the moment insofar as your situation is concerned. Your sister's divorce would be considered in accordance with the law of Gibralter. Under Scots law an inherited asset is not a matrimonial asset but the situation may be different in Gibralter and she should make her own enquiries.
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Customer: replied 2 years ago.
Thank you, ***** ***** provided the answers I was looking for and the service has been excellent.
Regards, Alan.