Name to be taken off title deed Tax implications?

Mark2016

A friend of mine was left a property by his late father. My friend's name together with his sisters is on the title deed. Unfortunately, they have different views on what should be done with the property. One wants to sell it and the other wants to rent it.

In the interests of family relationships and emotional wellbeing, my friend wants his name to be taken off the title deed. There is no outstanding mortgage on the property. My friend just simply wants off the title deed. He fully realises that legally he won't be entitled to any potential rental income or indeed a share of the profit should the property be sold in the future.

His concern is and the reason for my question is as follows:

If he has his name removed from the property, will he be liable to pay any tax? He won't in any way benefit financially. He just wants out of this arrangement.

Many thanks

TrickyDicky101

Potentially CGT could come into play but this will depend on the property's current value and the value when inherited (possibly also whether - in his period of ownership - has he ever lived in it).

So what are the relevant valuations?

martindow

Your friend's father presumably wished that both of his children benefitted after his death. This sounds like an emotional decision that he could regret in the future (not surprising after a bereavement).

I can understand his wish not to damage family relationships, but he does not seem to need the cash as he is willing to walk away.

So why doesn't he go along with his sister's idea of renting? His sister would be pleased as that is what she wants and he will (hopefully) get some income.

xylophone

So why doesn't he go along with his sister's idea of renting?

He doesn't want to be a landlord?

Would a Deed of Variation be a possibility?

https://uk.practicallaw.thomsonreuters.com/6-386-4134?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1

Mark2016

He doesn't want to be a landlord. He just wants to relinquish his ownership of the property and so in effect, give his ownership to his sister. In doing so, he won't benefit financially, but he wants to make sure that there would be no tax implication in his doing this.

TrickyDicky101

Mark2016 wrote: »

He doesn't want to be a landlord. He just wants to relinquish his ownership of the property and so in effect, give his ownership to his sister. In doing so, he won't benefit financially, but he wants to make sure that there would be no tax implication in his doing this.

TrickyDicky101 wrote:

Potentially CGT could come into play but this will depend on the property's current value and the value when inherited (possibly also whether - in his period of ownership - has he ever lived in it).

So what are the relevant valuations?

Any chance you could answer the questions re valuations?

00ec25

Mark2016 wrote: »

He doesn't want to be a landlord. He just wants to relinquish his ownership of the property and so in effect, give his ownership to his sister. In doing so, he won't benefit financially, but he wants to make sure that there would be no tax implication in his doing this.

as has been stated there ARE CGT implications depending on your answers to TrickyD's questions

Mark2016

The property is as I understand valued at £30 000. It's an old property. Howver, my friend isn't going to receive any funds. He simply
wants to absolve himself of any responsibilities pertaining to the property.

DumbMuscle

Whether your friend is receiving any funds is not relevant for CGT - he received the property as an inheritance, and will dispose of it as a gift, so the value of the "gain" is (value when gifted) - (value when inherited). Since he has an allowance of £11,300 before any CGT needs to be paid, he won't make enough of a gain to get taxed on it (unless the property has doubled in value since he inherited it, or he's made other gains in this tax year that put him over the allowance already).

teddysmum

We had an extended family incident like this, fairly recently and the executer (a solicitor) ruled that the house had to be sold, so that no one was deprived of access to their assets ( a minor was also involved, but had no input).

Slinky

If the father died less than 2 years ago, the brother can waive his part of the inheritance in favour of his sister with a deed of variation to the will. There will be no tax implications AFAIK