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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 8042
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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Need assistance with capital gains tax return, Uk, Am

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Hi need assistance with capital gains tax return
JA: Where are you? It matters because laws vary by location.
Customer: Uk
JA: What steps have you taken so far?
Customer: Am gifting property to brother but not sure if I need to get valuation of house for return
JA: Anything else you want the Lawyer to know before I connect you?
Customer: Property was buy to let previously . I am a high tax earner
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Customer: replied 1 year ago.
please

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Thank you for your question.

As you are transferring the property to your brother (a connected person for CGT purposes) the transfer is deemed at open market value.

I recommend you get valuation from 2/3 Estate Agents and use these valuations for your capital gains tax computation.

You would have to pay CGT on any gain arising from the transfer and also be mindful of gift's implications for Inheritance Tax puposes. This gift would be deemed a potentially exempt transfer and 7 years rule would apply to the gift. If you survive for 7 full years from date of gift the amount would be excluded from your estate for probate purposes.

Your brother as a recipient of the gift receives it free of any taxes as there is no gift tax in the UK.

My aim is to give you a professional service. I hope this is helpful and answers your question.

Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave JA today. If you need more assistance, please use the reply box below and le tme know. It has been my pleasure to assist you with your question.

Customer: replied 1 year ago.
Thanks. Can I use costs spent on the property which would have increased value. New kitchen new , new roof . I was working abroad for last 10 yrs and the property let out to my brother. When visiting uk I would stay with him For 3 weeks per year. Can I not use it as my primary residence as I had no other ? I have returned to uk and now renting elsewhere due to work.

Thank you for your reply.

Expenditure on capital improvements would be an allowable cost added to purchase price in arriving at gain.

Was the rental income from your brother declared?

Staying for 3 weeks a year would not make it your primary residence if you had another property in your name either in the UK or abroad. If this was the only property you owned before and after working abroad then you could deem this as your primary residence.

I hope this is helpful and answers your question.

Customer: replied 1 year ago.
Thansk I did have other property but they were commercial units.
Rental income was declared

Thank you for your reply.

In calculating the gain, you would take into account the period proprty was your main residence. As the property was let whilst you were abroad then that period does not count as period of main residence.

I hope this is helpful and answers your question.

If there are no more issues, I will appreciate if you would kindly rate my service by selecting the 5 stars at the top of the screen to ensure I get credited for it by Just Answer today.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 8042
Experience: FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and 2 other Tax Specialists are ready to help you

Hi there

Just checking to see if you need more clarification/information or have I answered your question.

If there are no more issues, I will appreciate if you would kindly rate my service by selecting the 5 stars at the top of the screen to ensure I get credited for it by Just Answer today.

Many thanks

Hi there

Just checking to see if you need more clarification/information or have I answered your question.

Many thanks

Customer: replied 1 year ago.
Hi if I sell portion of property to my brother = 34k value wud I be liable for the difference on sale and purchase
Customer: replied 1 year ago.
Liable for capital gains

Thank you for your reply.

It depends on the gain attributable to the percentage of share you intend to transfer to your brother. You would claim gains annual amount against the gain and the rest would attract CGT at 18%, 28% or a combination of both.

I hope this is helpful.

I will appreciate if you would kindly rate my service to ensure I get credited for it by Just Answer today.

Many thanks