Removing name from title deed

G_M

If no monies are exchanged is CGT still due?

Tom99 wrote: »

[FONT=Verdana, sans-serif]Your brother will be liable to CGT if he has not lived in the house the whole time since 1997.[/FONT]
[FONT=Verdana, sans-serif]Since you are connected parties the CGT will be based on the current open market value of the property not any sum you pay him for his interest.[/FONT]

The current value of the house is £450K.

What was the value on the date he became joint owner? How many brothers are there and do you all own equal shares - ie does he own 33.3% of the property?

mbugsy18

It is just 2 brothers and myself so 33.3% each. I think it was valued at £85K when probate was granted and no IHT as it was below the IHT threshold at the time. My brother who wishes me to remove his name has lived there until 2004 when he married.

G_M

Well 85K to £450K is a gain of £365K.
1/3rd of that is £121K.
Less annual allowance of 11K is £110 (taxable amount).

Assuming 18% tax rate, is £12.8K CGT
(all aprox figures)

Residency from 1997 - 2004 may reduce that.

saajan_12

Stamp Duty- If you pay brother any cash OR take over his share of a mortgage liability then you pay SDLT on this amount.


CGT - As you're connected persons, this is based on the market value of brother's share. Please answer these questions / correct these figures & dates:
1) Current market value = 450k
2) Value when acquired = 85k
3) Costs (fees for either transaction, capital improvement costs e.g. extension) = ??
4) Annual allowance = 11.7k (assuming brother doesn't realise ie divest of any other capital gains this year)??
5) Brother's ownership 1997-2018 => 252 months?? When was his name added?
6) Brother's Private Residence 1997-2004 plus last 18 months => 84+18 = 102 months?? When did brother live there as his main residence?
7) Assuming brother hasn't let the property since moving out?

Gain = Current Mkt value (450k) - Acquisition value (85k) - Costs
Brother's gain = 33.5% x (450k - 85k - Costs) = 122k
Annual allowance = 11.7k
Private Residence Relief = Gain x Time resident / Time owned
Private Residence Relief = 122k x 102 months / 252 months = 49k
Lettings Relief = 0

Total taxable amount = Gain - Allowance - PPR - LR
Total taxable amount = 122k - 11.7k - 49k - 0 = 61k

This is then taxed at 18% (basic rate) or 28% (higher rate) or somewhere in between if the gain causes brother to cross the higher rate threshold. So 11k - 17k in tax to pay!

mbugsy18

Cheers saajan-12 very good breakdown for CGT. I!!!8217;ll let him know as I don!!!8217;t know if he has made any other gains this tax year.

If I want to sell the property instead am I liable for CGT since this has been my main residence?

p00hsticks

mbugsy18 wrote: »

If I want to sell the property instead am I liable for CGT since this has been my main residence?

No you won't be - but your brothers who are not living in the house will be.

saajan_12

mbugsy18 wrote: »

Cheers saajan-12 very good breakdown for CGT. I!!!8217;ll let him know as I don!!!8217;t know if he has made any other gains this tax year.
- also the dates he was first added to the deeds and what periods brother has lived there. That'll affect the PPR relief.

If I want to sell the property instead am I liable for CGT since this has been my main residence?

No CGT on your share if you've lived there for the whole time you owned the property. If not, maybe.

mbugsy18

Sorry for so many questions. I have just been reading up on tenancy in common and joint tenants. Would it be simpler to change from tenants in common to joint tenants so if any of us die the equity/ share will be transferred to the remaining joint tenants? Are there any tax implications if we go down this route?

Tom99

mbugsy18 wrote: »

Sorry for so many questions. I have just been reading up on tenancy in common and joint tenants. Would it be simpler to change from tenants in common to joint tenants so if any of us die the equity/ share will be transferred to the remaining joint tenants? Are there any tax implications if we go down this route?

[FONT=Verdana, sans-serif]Yes you can do that and if the current ownership is 1/3rd each then there will be no tax consequences and no charge unless you employ a solicitor.[/FONT]
[FONT=Verdana, sans-serif]It will achieve what your brother wants, his share will go to the surviving joint tenants and cannot be left in his will.[/FONT]
[FONT=Verdana, sans-serif]https://www.gov.uk/joint-property-ownership/change-from-tenants-in-common-to-joint-tenants[/FONT]

getmore4less

mbugsy18 wrote: »

My brothers and I are on the title deeds of our family home. I have been living in the house since my father died in 1997. I have looked after my Aunt who was disabled on my own since my father’s death. His will stipulated that the house cannot be sold until her death which was sadly on Dec 31 2016. One of my brothers has asked me to remove his name from the title deeds should anything happen to him as he doesn’t want any of his spouse’s relatives have a claim on the house.
Is this something I can do without a solicitor?
What would I need to do regarding Land registry to remove my brothers name from the title deeds?

Any capital gain liability should start from the value at the end of 2016 for any non resident beneficiary.

Gifting the asset now(even with a DOV) could be challenged by interested parties later.