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Sam, Accountant
Category: UK Tax
Satisfied Customers: 13862
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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My Father and Grandfather are joint-owners of a warehouse

Customer Question

My Father and Grandfather are joint-owners of a warehouse valued at £200k. My grandfather wishes to transfer his share of the property into my name. However, he is currently based abroad so would my father have to be present if we were to execute the deed
with a witness? I have the AP1, TR1 and ID1 forms to complete as part of the process. Would i require anything else? Also, are there any tax implications (IHT, CGT) if and when my grandfather transfers the property to me or would it be more beneficial if they
both transferred it into my name at the same time? I look forward to your reply.
Submitted: 2 years ago.
Category: UK Tax
Expert:  Sam replied 2 years ago.
Thanks for your question
I can advise the tax side of matters (as your question has come through on the UK tax forum) but we are not lawyers so you will then need to get legal advise regarding the question of whom needs to be present and the relevant forms you advise of.
Would you like me to proceed with the tax side of your question, if so please advise whether the property had generated rental income on which both your grandfather and father declared to HMRC, or did this form use in a business they run?
How long has your grandfather been out of the UK - and is he a UK citizen and finally is your father resident in the UK
Customer: replied 2 years ago.
Hi Sam, I am happy for you to proceed with answering the question.They have have been renting the property for around 10 years and my Grandfather tends to spend six months abroad and the other six months in the UK. My only concern now is that he has fallen ill and he may not travel to the UK anytime soon, as to why the forms will be completed abroad. They are both UK citizens and my father is resident of the UK.regards,Dom
Expert:  Sam replied 2 years ago.
Hi Don
Thanks for your response
if your grandfather had been spending 6 months in the UK - then he would have continued to be treated as a UK resident (as anything more than 90 days but less than 180 days still creates a UK residency - so this may affect this proposed transfer.
And that being the case then as this is a commercial property this will give rise to a capital gain due and payable in the UK - and the same would apply to your father who is resident throughout.
Furthermore as its not been used for trade purposes (in a business that your father and grandfather ran) but was merely generating rental income from someone else s trade, then it also will not attract any further tax reliefs under the business relief remit.
Plus even though it would appear that no money will change hands between you and grandfather - this is still treated as a gain formed by the market value at the time of the transfer (grandfathers half share) from which the value at time of purchase (grandfathers half share) is deducted.
Then the first £11,100 is deducted and the remaining gain liable to capital gains.
The same applies to your fathers position whether he undertakes this now or in the future -
Then with respect to the forms you would need to consult a conveyancer or lawyer as to the requirements with the transfer documents and who needs to be present and when.
let me know if you have any further questions on the tax position - I am due to go out to meet with clients soon - sand it will be late by the time I return - so will answer any follow up questions you have on this matter tomorrow - if that's acceptable