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Shared concerns
Q:
Since December 2001, I have owned a half-share in my brother’s house, which is his main and only residence. My investment is purely financial, i.e. I have not lived in this house. I have taken no interest payments and have contributed to some of
the maintenance. We are both aged 72 – I am married and my wife and I live in our own property. I would like your advice concerning my best options regarding tax liabilities if:
(a) I sell out of my share before the death of either of us, or
(b)I pre-decease my brother before a sale is made, or
(c)he dies before me?
Geoffrey Born,
Sutton Coldfield
A:
Donna Bradshaw replies:
The situation regarding tax is as follows:
(a) If you sell your share before either of you die then you will be liable to capital gains tax (CGT) on the gain (subject to the annual CGT exemption and other reliefs). CGT is changing on 6 April 2008 and, if you do sell, it could be advantageous to wait for the new rules to come into effect.
(b) If you pre-decease your brother, your share will form part of your estate and there will be no CGT to pay. It may, however, be liable to inheritance tax.
(c) If your brother dies before you, there will be no CGT to pay until you sell or gift your share of the property. There may, of course, be conditions attached to ownership and sale of the property that I don’t know about; however, these won’t affect CGT.
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The limitations of nominees
8 August 2008 [0 comments]Q:
Having read various pieces in your magazine at different times regarding the merits and demerits of certificated and nominee share dealing, it seems to me that certain advantages of holding certificates have been missed.
Indeed, I recently attended an Alliance Trust Roadshow and sat on a ‘shareholder club’ discussion group, where I was amazed to find, among a fairly sophisticated bunch of investors, such a lack of appreciation as to the shareholder rights one loses with a nominee account.
As an extra thread, I also recently attended the AGM of an investment trust in Edinburgh. As a trustee to my grandchildren’s funds, my name was missing from the list at reception. I was told that I was welcome to the meeting as long as I didn’t participate in the voting.
I was further informed that had I informed the plan managers of the trusts beforehand, I could have voted. It occurred to me that nominee shareholders may well find that if they feel strongly about an issue, they might be able to exercise their voting rights in a similar way. I would be interested in your panel’s thoughts on this subject.
Bev Wilkinson
via email
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