Buying my brothers share
Discussion
My brother and I inherited a property in Wales back in 1992 the value then approx £35 k present value £110 k always been rented out.He would like me to buy him out.
Are there any pitfalls or financial implications to either of us.Is there a tax to pay on a purchase of a B T L would I be liable
Thanks Regards Baz
Are there any pitfalls or financial implications to either of us.Is there a tax to pay on a purchase of a B T L would I be liable
Thanks Regards Baz
He will have a capital gains tax liability on his share.
As he's never lived in it, there won't be any relief against this apart from his own annual allowance, £11,700 for 18-19. From what you've given us, his gain on the property will be about 38K (£110k - 35K)/2, less any buying and selling costs. You then take off personal allowance and the remainder is taxed at either 18% or 28% depending on his other taxable income. 18% if he's a basic tax payer, 28% if higher rate tax payer.
And, before you ask, if he gives you his share the transfer is still deemed to be at market value by HMRC, regardless of how much cash/consideration changes hands.
As he's never lived in it, there won't be any relief against this apart from his own annual allowance, £11,700 for 18-19. From what you've given us, his gain on the property will be about 38K (£110k - 35K)/2, less any buying and selling costs. You then take off personal allowance and the remainder is taxed at either 18% or 28% depending on his other taxable income. 18% if he's a basic tax payer, 28% if higher rate tax payer.
And, before you ask, if he gives you his share the transfer is still deemed to be at market value by HMRC, regardless of how much cash/consideration changes hands.
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