CGT - Beneficial Ownership

Dear Sir/Madam, My query is regarding CGT on residential property and the issue of beneficial ownership as to how any CGT is declared on an individual(s). I have come across guidance CG70230 which highlights indicators for deducing beneficial ownership. This refers to 'Land' on the article heading, but does this also cover residential property too? Is residential property also subject to these beneficial ownership indicators? Thank you for your help.

Hi,

For Income and Capital Gains Tax purposes, there are two types of ownership, legal ownership (TSEM9120) and beneficial ownership (TSEM9130).  

TSEM9120 - Ownership and income tax: legal background: ownership - legal owner

TSEM9130 - Ownership and income tax: legal background: ownership - beneficial owner

The beneficial owner is the person for whose benefit the property is held. It is distinguished from the person in whose name the property is held (the legal owner). The person chargeable is normally the beneficial owner of the asset which has been disposed of. The same person may be both legal owner and beneficial owner of the property, but there can be a separation of the two.

Thank you.

Thank you. So just to confirm are the indicators I referred to initially, relevant still as usable indicators of beneficial ownership or are these only to be referred to for land purposes and not property?

The reason for my initial query, was due to having the following scenario: Property legally owned by a mother and her two sons (both over 18) as shown on Land Registry. Mother provided the funds to buy the property initially and she received all the rents and declared on a tax return. Proceeds on sale of the property were, however, split equally 3 ways between them all. What is the beneficial interest here for the purposes of declaring a capital gain on disposal? Thank you for your co-operation.

Hi,

It also refers to property.

Thank you.

I am not HMRC Admin, but you may find these pages useful. https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9160 https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9105

Thank you to HMRC admin and Bella Boo for your kind help. Much appreciated

Hi Filbert79,
Capital Gains Tax comes down to beneficial ownership.
If the three of you were beneficial owners.
Then you are correct that one third of the Capital Gain should be declared by each of you.
Please see Tax when you sell property:
Tax when you sell property
Thank you.