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Portfolio partition

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24 July 2012

Issue: 4363 / Categories: Forum & Feedback

Two clients, who are brothers, own a portfolio of properties which is held in their joint names. They wish to transfer properties between them so that they are owned outright. Will a capital gains tax liability arise on such a transfer?

I have two clients (brothers) who own a small property portfolio in joint names. They wish to exchange their half shares such that each owns some of the properties outright.

The disposals of their half shares are of course disposals for capital gains tax purposes at market value as they are connected persons.

There used to be an extra-statutory concession (ESC D26) which gave relief in these circumstances such that no capital gains tax was payable if the joint owners became sole owners.

However this concession was withdrawn in 2010 and from what I have researched has not been replaced by legislation so my clients will have to pay tax if they go ahead with the exchanges.

Am I correct in my understanding of the situation post-withdrawal of the ESC?

I look forward to responses.

Query 18 030 – Bros

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Portfolio partition

© Copyright LexisNexis 2024. All rights reserved.

24 July 2012

Two clients, who are brothers, own a portfolio of properties which is held in their joint names. They wish to transfer properties between them so that they are owned outright. Will a capital gains tax liability arise on such a transfer?

I have two clients (brothers) who own a small property portfolio in joint names. They wish to exchange their half shares such that each owns some of the properties outright.

The disposals of their half shares are of course disposals for capital gains tax purposes at market value as they are connected persons.

There used to be an extra-statutory concession (ESC D26) which gave relief in these circumstances such that no capital gains tax was payable if the joint owners became sole owners.

However this concession was withdrawn in 2010 and from what I have researched has not been replaced by legislation so my clients will have to pay tax if they go ahead with the exchanges.

Am I correct in my understanding of the situation post-withdrawal of the ESC?

I look forward to responses.

Query 18 030 – Bros

Reply from...

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If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

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4363

Categories: Forum & Feedback [1]

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