Should he sell Mum's cottage?

takoo

Hi Bluetint

I suppose any inheritance tax has been cleared and that the holiday net income is taxed to income tax.

If they sell they may be liable to capital gains tax on the net gain since the last date of death (oevr 5 years). The property is probably higher in value now than then.

I am not sure how a share is treated but I suppose they are "partners" and there is no holding company for the house or business...?

If they are individuals they will probably each have an CGT allowance - so no CGT arises...? (Need to check this out with accountant or the HMRC Enquiries Office - they are always helpful to me|.)
Regards
Takoo

takoo

Hi Again
In your post you say it has been a holiday let. For tax purposes holiday lettings are defined so that no letting is more than 30 days.

If it is a holiday cottage letting and they are selling the business it may be worth reviewing CGT rollover and CGT retirement relief - but I have some doubt that they both exist or apply here if they do!

Sorry if this is a red herring.

Takoo

EdInvestor

I agree they need expert advice on the tax situation first, as buying out the other brother may trigger a CGT event. The CGT rules are about to change dramatically as well.