Good afternoon, along with two siblings we own some agricultural land as tenants in common ,the shares being 50/25/25 %.
If we switch to a joint tenancy the shares will automatically become 33.3/33.3/33.3 %.
Will the person whose share has been reduced from 50 to 33.3% be deemed to have disposed of the difference for CGT purposes at the time we become joint tenants? Does tax become due at that point like it would if the share was gifted instead. Any help will be appreciated.I appreciate we will be taxed differently when we actually sell the field .
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Paul ,thank you for the reply. The plan is to sign a declaration of trust to that effect and remove the restriction on the proprietorship register at the Land Registry.
Be aware of a possible further CGT event should the land become part of trading stock. This can be avoided but it may be better to pay it.
There's a good, maybe even strong, case for taking professional advice early doors if there's a significant profit lurking in the wings.
I'm not convinced that changing from tenants in common to joint tenants changes anything as far as the value/share of ownership goes. All it means is that if one person dies their share transfers to the remaining owners. I think this is more of a legal question that you should be asking your solicitor.
Thank you for the replies.
On reflection i dont know what i was thinking of when i said that as joint tenants the shares are 33.3% each ,we will actually all have an interest in 100% of the land.I agree that a solicitor is most likely the way to go
Yes, but any rent and, if the land was sold, the proceeds would be split a third each. Pace Dougscott the 50% holder will have made a disposal on the change to JT.
Presumably the proposed change would require unanimity, would you get that?
But why would you want to restore the JT (as opposed to owning a third each TIC)?