tenants in common & cgt

ramborai1987

hi me and my sister own a house 50/50 as tenants in common.

we renovated the house for rental but now considering sale.

what i needed to know is are the capital gains tax rules different for tenancy in common, meaning me and my sister have to fill in seperate capital gains based on the equity share we own?

i understand in joint ownership (like my mum and dad), only one person has to fill it in under their name if they own a house together. just need this clearing up.

thanks!

p.s would it be better to sell this current tax year or wait next, considering im non - rate and my sister 40% on a 40000 gain with full capital gain allowances.

ramborai1987

ive sorta answered my own question, i found out on another site capital gain/loss is figured out depending on equity share. meaning its me 20k and my sister 20k.

all i need to know now is whether enhancement costs/costs of aquisition and disposal are calculated depending on equity share also or if im allowed to state the full amount on my tax return. anybody know?

thanks

silvercar

If you have 20k profit then you have a CGT allowance of £9,200, leaving 10,800.

This will be taxed at your marginal rate. For a 40% tax payer the bill would be 4,320. For a non-tax payer, the first 2,230 is taxed at 10%=223, the remaining at 20% =1,714; 1,714+223=1,937.
Total for you and your sister=4,320+1,937=6,257.

Under the new rules, if they do become law: 10,800@18%=1,944 each ie 3,888 in total. So you need to wait and your sister give you a gift of a couple of hundred pounds.

If you lived in it, your share of the profit would be exempt from CGT. If you are going to wait until April, could one or both of you live in it between now and then?

kunekune

What I was going to say, before you answered your own question, is that the whole idea of TIC means that the situation will be different. Rather than being joint owners of the whole property, you are separate owners of a specific share of it. So it stands to reason that your capital gains are based on the percentage gain that your percentage share achieves.