Rental Property Treatment

26/01/2018 12:58:33
From: Alan1970

Date: 24/01/2018 20:51:50
Subject: Rental property treatment
My brother has a rental property and has been reporting rental income for the last few years.

In 2016/17 tax year his new wife became joint owner of that property and jointly on the mortgage.

1 does this mean cessation of one business (sole trader) with accounts and tax liability on my brother only up to the change
2 from the date of change there is a new joint business split 50/50
3 the costs of having his wife added to the mortgage are substantial and would create a loss on the joint business under (2) above
4 can my brother offset his profit in the sole business against the loss in the joint business as they are within the same tax year
5 are there any CGT implications? Whilst the property was not sold, is there a deemed sale and repurchase at an estimated fair valuation at the point where it became a joint property, or are there no CGT implications as they are husband and wife.

Sorry for so many questions and thanks in advance


Rental Property Treatment

26/01/2018 14:42:35
Hi Alan

The queries you raise would be referred to our technical advisors. You can request a webchat by following the attached link https://www.gov.uk/government/organisations/hm-revenue-customs/contact/self-assessment