Tax when changing from Joint Tenants to Tenants in common.

Years ago my girlfriend was living in a council house and wanted to buy it, she couldn't afford the mortgage on her own so I bought the house with her as Joint tenants. We then bought a family home together and she rented out her house and I also rented out a flat that I had when I met her. We have children together and one child each from previous relationships. She gets all of the income from her rented house but because we are joint tenants my share of the profits are taxed at 40%. We have been told by a solicitor that we can severe the Joint tenants agreement on the title deeds and replace it with Tenants in common with the ownership set at 99% in her favour and 1% to me. We can then get a Deed of Trust set up to state that she will receive 100% of the profits (or losses) from the rental income. By making the above changes will there be any capital gains tax due? Thanks in advance.

Hi,
The answer is no as you have not sold the property.
Thank you.

I also asked my accountant the same question and he seems to think that because I am in effect gifting my share to my girlfriend then there would be capital gains tax due to be paid by her. Who is correct? I am hoping my accountant is wrong.

Hi Mark Roberts,
As you still own the property there is no capital gain.
It will only be when it is sold that any capital gain will arise and you will be taxed according to the tennants in common split.
Thank you. 

 

Hi there, Does it make any difference if the two owners are not husband and wife? For example if a father and son want to change their joint tenants to 99% and 1% Tenants in Common. Is the GST still not applied in such change? Thank you.

Hi DaddyPaul,
Please see:
CG70525 - Land: severance of joint tenancy
Thank you.