CGT calculation of base cost

CGT calculation of base cost

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Hi
I'm having trouble with a CGT computation and the base cost to include in the calculation.

Two brothers owned a property since 2000 (worth £100k). The property was then sold to one of the brothers and his partner in 2003 (they paid £80k to the brother, £40k each).

Upon any subsequent sale by the brother and his partner, will the brother's base cost be his original half share in 2000, and the partner's base cost the amount paid to the other brother in 2003? That was my original thought, but ..

The brother and his partner jointly paid the other brother for the property to be in their names, so does the brother also take on half of the amount in 2003, and his partner one half?

i.e
Should base cost for brother be 100/2 =50k and base cost for partner £80k, or
Should base cost for brother be 100/2 =50k + £40k =£90k and base cost for partner £40k

Am I missing something obvious or is it just late in the day.

Help.....please.

Thanks

Martin

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By User deleted
19th Feb 2007 09:01

Sorry, didn't make that clear
The brother and his partner now own the properties jointly in equal shares, so he has not acquired a further 25% in 2003 (although he funded half the purchase in 2003 as they have joint bank accounts).

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By User deleted
19th Feb 2007 10:26

Querists: please, please gets your facts together
We now have to infer that brother gifted money to his partner so he/she was enabled to acquire a 50% share . So we now have two equal co-owners, one with a CGT cost of 50K and the other 80k (by way of a non-connected parties' transaction). If these percentages are not recognised by either the Land Registry or a Declaration of Trust , I give up. You are absolutely sure , I suppose, that partner is not holding any part of the property as nominee for brother ? This situation would have to be enshrined in a legal document.

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By User deleted
16th Feb 2007 11:36

You are there in the end
Brother currently owns a 75% share: 50% cost 50k in 2000 and 25% cost 40k in 2003. The partner has a base cost of 40K.
The 2003 transaction between the brothers was a "connected" one
so are you satisfied that market value was paid ? If the latter was higher , then the 2003 base cost goes up too -- and probably the partner's because the deal , being at a "giveaway" price, would not have been a bargain at arm's length.
Mind you, looking at the figures given, it does not appear any favours were given by either party.

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