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Clare
Clare, Solicitor
Category: UK Law
Satisfied Customers: 33901
Experience:  family solictor with 25 years experience
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Clare My mother inherited her family home on the death

Customer Question

Hi Clare
My mother inherited her family home on the death of her brother 9 years ago. She immediately gifted it to me to avoid future inheritance tax issues and is now in my sole name although it is only used as a second home by my mother, my brother and myself. I always knew that is had been put in my name to avoid tax for all the family and as such don't really consider it 'mine'. My mother now is sorting her own will out and we decided it would be fairer to all if the property was put in both mine and my brother's name so that he would eventually get 50% of any proceeds should it eventually be sold. However if I 'gift' 50% of the property to him I understand that I will be liable to CGT now even though the property is not being sold. If that is the case it will make it too expensive for me to do so.... I thought I could draw up a private document between me and my brother promising him 50% of the proceeds of the property in the event of a sale but not sure if this could be done or what could be an alternative which would be fair to my brother but not incur very high taxes immediately?
Thank you!
Submitted: 1 year ago.
Category: UK Law
Expert:  Clare replied 1 year ago.
Hi
Thank you for your question.
How much was the property worth nine years ago and how much is it worth now?
Clare
Customer: replied 1 year ago.
Hi£450,000 and £550000 now
Expert:  Clare replied 1 year ago.
Hi
Have you made any other chargeable gains in the last three years?
Clare
Customer: replied 1 year ago.
No
Expert:  Clare replied 1 year ago.
Hi
Have you spent any money on improving or maintaining g the property: what is your current tax band?
Clare
Customer: replied 1 year ago.
No significant money spent on property maintenance. I'm not a higher tax band payer, so 20%.
Expert:  Clare replied 1 year ago.
Hi
So the Current Bill would be £16,500 (roughly)
I understand that this would be a large hit now - but I assume that your brother will pay half?
If you Transfer now then the gains to date will be crystallised - whereas if you take another option the gains will increase and when the sale finally happens you will still only have one person's allowance to use rather than two!
However if you do still need to delay it then the way forward is to have a Declaration of Trust confirming that you hold the property on behalf of yourself and your brother
I hope that this is of assistance - please ask if you need further details
Clare
Customer: replied 1 year ago.
Yes it is, thank you.
Expert:  Clare replied 1 year ago.
Hi
You are welcome - I hope all goes well
Clare

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