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Readers' forum : Flat share

09 August 2016
Issue: 4562 / Categories: Forum & Feedback

Tax on the sale of a property after the sale of a part share to sister living there.

Sister X owns a flat she used to live in. Sister Y moved into it. X needed cash so in 2014 they came to an agreement: Y paid £150 000 for a 22.6% share of the flat based on an estimate of the market value at the time. This is not evidenced by any legal documentation – I am told ‘it was an exchange of emails’. The flat has increased in value considerably: if it is sold Y may receive £200 000.

My question is whether this could be a gain on an interest in her only or main residence? If so what does she need to do to establish that this?

Does it depend on how X treated the receipt of £150 000 in 2014? If they described it in their emails (which I have not seen) as ‘a loan linked to the value of...

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