I would like information and opinion on
documenting ownership of a leasehold flat
a friend used some of my money to buy a leasehold flat at auction
we agreed to share ownership but the lease is in his name
there is no dispute about this shared ownership and we both want to regulate it
my questions are
- would the regulation of our previously agreed shares be a transfer or sale or gift or what
- no money will be available or used so would any tax be involved
- would there be some time element like 7 years for iht
any insight or details or opinion would be well received (as always on this board)
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Shares of ownership
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Re: Shares of ownership
pdnw10 wrote:my questions are
- would the regulation of our previously agreed shares be a transfer or sale or gift or what
What you need is a Declaration of Trust. This is a simple document that specifies the shares that you each own in the flat (for example, 50/50 or one third / two thirds). There is no element of transfer / sale / gift at all. It was simply a joint investment and the DoT records that fact.
- no money will be available or used so would any tax be involved
There would be no tax implications on executing a DoT, as it simply records the status quo and is not a transaction in itself. There may be capital gains tax if you make a profit on selling the flat. If so, this would be divided between you according to your respective interests in the flat as recorded in the DoT.
- would there be some time element like 7 years for iht
No. The 7 years period is the one that applies to lifetime gifts, but you have not made any gifts.
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Re: Shares of ownership
Thank You for your detailed reply.
We were aware of the DoT and your explination makes it very clear.
Thanks again
We were aware of the DoT and your explination makes it very clear.
Thanks again
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