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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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Disappearing trust
15 August 2008 [0 comments]Q:
I wish to draw your attention to the ‘Resources Investment Trust’, which is listed in What Investment in the sector entitled ‘Specialist: Liquidity’. In fact, this trust should be in the sector entitled ‘Specialist: Commodities & Natural Resources.
The trust was correctly listed in ‘Specialist: Commodities & Natural Resources’ up to and including August 2007, issue 293, but in the next issue, September 2007, it had been moved to ‘Specialist: Liquidity’.
Also, the performance figures in issue 302 of What Investment, May 2008, for the Resources Investment Trust appear to be somewhat excessive – far outperforming the Merrill Lynch World Mining Trust. Are you certain that these figures are accurate? The reason I query the figures is because I have seen performance figures for these trusts in
other publications where the Resources Investment Trust mostly underperforms the
Merrill Lynch World Mining Trust.
Derek Crawford
Via email
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