2nd property tax when buying out share of jointly owned inherited property?Make Text Bigger
When our parents died a few years ago my siblings and I inherited their house. My sister, living away, wants to return to live there eventually, but was unable to buy the others out at the time. We therefore agreed to transfer the property into our joint names and let it pending her being able to buy us out one at a time, as and when her circumstances permitted.
I have belatedly come to wonder how the 2nd Homes tax will affect that transaction. At current validation our individual shares are worth around £35-£38k, ie, under the £40k threshold. Does that mean buying out one of the other shares means no tax is payable? Or will the tax be assessed on the value of the property and then apportioned to the share being transacted? Or could the tax be avoided by one of us gifting their share to the sister (who would then pay the going rate to the donor as separate and unrelated money transfer). We all own our own homes so the parental home is definitely a second property for us.
The 2nd property tax was never aimed at people in our situation but I have a horrible feeling we will suffer as an unintended consequence!
Has anyone any thoughts?
The property is in Scotland so its version of the tax will apply.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.