CGT on own home?

Listener11

I’m hoping someone can give me some advice.   I jointly own a small holding along with my brother and mother.  There are no defined boundaries at the property even though my Mother has only lived in her (and my fathers when he was alive) house, my brother only ever lived in his house and I resided only in my house.  Now we are going through inheritance process and the issue of boundaries has reared up.  I am being told that to create boundaries, IE to separate the houses and a piece of garden for each, that we cannot simply take our own properties because we each jointly own the the others houses and that to create a boundaries incurs capital gains tax because my bothers house and my mother house are classed as my second homes and getting rid of them leaves me with a CGT bill on the profits.  My brother and mother incur the same for the same reason.  Surely this can’t be correct as we have been living there for over 23 years in our own houses?

Please can you help

casper_gutman

Not my area of expertise in any way, but apparently there is a specific concession under CGT rules for joint owners to exchange their joint interests without paying tax.
https://www.taxinsider.co.uk/splitting-land-or-property

The example given there is of two brothers who jointly own four buy-to-let properties and decide to own two each, but your situation of family members jointly owning a smallholding with three houses and wanting to split the property seems similar. I'd ask a tax professional (as opposed to e.g., a conveyancer), specifically mentioning the concession mentioned on that page.

silvercar

Welcome to the MSE forum. Your question is best placed on the tax board that can be found here: https://forums.moneysavingexpert.com/categories/cutting-tax


I will ask the forum team to move this to the tax board.