Readers’ forum: Tax approach to transfer of value between joint owners

I have a new client who jointly purchased a house with his son for £340 000 some years ago with my client contributing £120 000 and his son contributing £220 000. This is the son’s main residence and is now worth £1m.

A few years ago a declaration of trust was put in place to confirm the ownership position. The declaration of trust states that: ‘The parties declare that they are holding the property and net proceeds of sale and net income until sale upon trust for themselves as beneficial tenants in common as follows:

The parties covenant with each other that in the event of the property being disposed of the proceeds of sale shall be calculated as follows:

Agreed sales price less:

• Legal and estate agents’ charges upon sale.
• Remaining money after above deductions split between the parties in the following shares: i) as to £220 000...