SDLT and amount to pay for other half of property

Bookworm105

pumas said:

Oh dear, it seems to get more complicated!
In England. Freehold. No Mortgage. My only property which was gutted, walls stripped, ceilings down, re-wired, CH installed,  cost me near 100k- Sibling has never paid for anything 
2006  LR value 150K, 2 of us inherited, now 400K.


.....because you are siblings and therefore "connected persons", sibling's CGT is based on the market value at point of sale, not the actual price paid (to negate obvious price manipulation)
So, half market value would be 200k, and is that what they pay CGT on? (minus the 2006 half value of 75k) and obviously can't claim any relief on the 'extra'  50k


...The threshold for SDLT at the standard rates is presently £250,000, but is set to revert to £125,000 on 1 April 2025.
 But I read it that the allowance is pro rata to the share being bought, so I have skimmed through the 70+ SDLT questions.

I was trying to get my head round all the costs this sale will generate, it seemed so straightforward initially. As my sibling has done nothing and paid nothing for 20 years, I just wanted to make it simple when the first dies!

I appreciate the responses,  presumably the conveyancer can sort it out, as sale progresses. 

conveyancers do not do tax calculations!

CGT
as others mention, 50% share of market value of an occupied property is not 50%  of the unoccupied "open" market value of £400k. 
That said, whether paying an accredited professional valuer to give you such a figure and have the professional creditability to carry that off if you end up in a valuation tribunal (for which they would doubtless charge extra fees) is a simple case of economics: fee v tax saved

so this was an inheritance... therefore as far as sibling's acquisition cost goes your idea that it would be 75K depends entirely on whether any inheritance tax was paid. If not was paid then HMRC have not "ascertained" the property's value at date of death in 2006, and would thus refer the case to their in house valuers who may, or may not, agree with £150k as the value at that date. If they don't you'd need to contest at a tribunal and would be wise to be represented by a professional valuer, not DIY.

given this was an inheritance there are no costs associated with its purchase, so sibling faces CGT of:
(400k "market" value at point of disposal (TBC) - value for probate 150k) = gross gain x his share 50%(?) - his CGT allowance (currently 3k) = net taxable gain 

SDLT
see comment above from the geek

(FYI  none of those refurb costs are capital, they are all revenue repairs, and so disallowed for CGT purposes - although as sibling never paid them that is utterly irrelevant)

pumas

If I'd known then, what i know now, I'd never have gone for T-I-C, or any joint enterprise and would not recommend  in similar circumstances.

Bookworm105

pumas said:

If I'd known then, what i know now, I'd never have gone for T-I-C, or any joint enterprise and would not recommend  in similar circumstances.

? 
whilst it is true that on inheritance the beneficiaries can choose between registering their ownership as either TIC or JT (joint tenants), in the circumstances where there are only 2 people involved, and the will did not specify a set % to each, then TIC or JT makes no difference whatsoever, they each have 50%