Bash Khanzada, enquiries consultant at Croner-i, defends a taxpayer in dispute with HMRC over a capital gains tax bill where the distinction between legal and beneficial ownership of a property was the critical issue
Our client found herself facing a significant tax liability due to a dispute with HMRC over the legal title versus beneficial ownership of a property. With careful legal argument and a strong evidential basis, we successfully defended the client and secured a closure notice from HMRC with no further amendments required.
Background
HMRC initiated an enquiry into the client’s affairs, alleging that she had disposed of a residential property but had failed to notify HMRC of a CGT liability. The client and her brother had inherited equal shares (50% each) of a property (Property A) after their parents passed away.
The client subsequently relinquished her 50% share in Property A in exchange for full ownership of a different property (Property B) owned by her brother. This agreement was made orally and was considered an arm’s length swap, as Property B was of a lower value and similar in value to the equity she had given up in Property A.
