Foursome want to split tax efficiently

by Property 118

11:24 AM, 25th January 2018
About 11 months ago

Foursome want to split tax efficiently

Make Text Bigger
Foursome want to split tax efficiently

Nine years ago my wife, myself and two friends did two Joint developments. Land registry and mortgages in all 4 names, but our tax lives are massively different now. Whilst we have a good amicable relationship I would like to figure out how we “de-link” ourselves by splitting up and having one property each without having loads of CGT or SDLT.

My wife manages both properties through our very small lettings business. New AST’s signed a year ago, now rolling.

Both properties are 3 bed EOT houses worth roughly the same (Bluebell Purchase £158k, Mortgage 155K, Est Val £220k – Merlin Purchase £125K, Mort £110k, Est Value £200k )

We used last years CGT allowance but have nothing planned for this years, so have both CGT allowances available to us. – If it helps I have a company that flips one commercial conversion to residential flats each year. Profit goes into Pension pots (we are 60 and 64).

Neither of us work and we keep our joint incomes well inside the 40% Tax bracket. We have 4 other properties.

I cannot give you any information about the other couples tax situation, which makes me feel the partnership path might be uncomfortable.

Any suggestions how we de-link ourselves in a tax efficient manner?

Cheers Allan



Comments

Neil Patterson

11:27 AM, 25th January 2018
About 11 months ago

Hi Allan,

This is going to be tricky to give specific advice on without all the facts and circumstances so you may want a private consultation >> https://www.property118.com/consultancy-mark-alexander/ with Mark, but I will see if he can add any comments as well.

Mark Alexander

11:42 AM, 25th January 2018
About 11 months ago

I’m stumped on this one too

I recommend a consultation with Pacific Limited Chartered Accountants in Norwich. Tel: 01603 630684, ask for Neil Barlow and tell him Mark Alexander referred you.

Allan Wadsworth

14:16 PM, 27th January 2018
About 11 months ago

Wow,
If your two knowledgeable people cannot give an instant answer that makes me feel good. If you had said o' just do this... I'd have been annoyed at myself for not knowing. This way i can feel smug.

Many thanks for the support and the contact details.
Allan

Allan Wadsworth

21:34 PM, 3rd February 2018
About 11 months ago

What a helpfull company Pacific Limited Chartered Accountants are.
within 2 hours of calling them I had a call back from Graham Mitchel who gave me lots of usefull thoughts of how to do it and this specific bit of legalese to mention to my accountant "Exchange of Joint Interest". Graham was most polite but pointed out that most accountants would already know about this! - oK so I should have gone to my accountant first. Its# sounds good for me and i think moves my partners below the S24 radar, although that will be just there challenge soon. - Great help - Thanks Property118 and Pacific Chartered Accountants and of course Graham Mitchel.

Mark Alexander

16:29 PM, 4th February 2018
About 10 months ago

I feel a bit daft now because I did know that and had forgotten about it. There is even a useful example in HMRC’s internal manuals https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg73025


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

HMO - Camden Council sending letters to the mortgage provider?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More