Q&A: exchange of joint property interests and CGT

In this week’s Q&A, Croner Taxwise tax adviser Ibrahim Nalla considers whether there are any capital gains tax (CGT) reliefs available when taxpayers change ownership of properties

My client (Peter) and his brother (Fred) jointly own two rental properties but now wish to rearrange their holdings so that they each own a property. Property A has a market value of £250,000 and has a base cost of £90,000 and Property B has a market value of £230,000 and has a base cost of £40,000. It is intended that Peter will take Property A and Fred will take Property B. We want to know if there are any capital gains tax (CGT) reliefs they can claim?

The brothers are connected persons for CGT purposes (section 286 TCGA 1992) and any transactions between the two are deemed to take place at market value (s18 TCGA 1992).

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