deed of understanding

Some years ago my partner and I decided to buy a holiday home. We are not married. The house was bought in their name however our agreement was always they would would be the legal owner but the purchase was on a 50/50 basis and if the house was ever sold we would each benefit from 50% of any net equity. This is still our agreement. We now want to sell the house and for each of us to receive 50% of the net equity. I have heard of something called a deed of understanding document. If we got a solicitor to create such a document for us today then after the sale and once we have paid any CGT due etc can I then receive 50% of the net equity without incurring any other taxes e.g. income tax or gift rules etc? Thanks.

If anybody knows anything about this sort of thing would be good to get a reply?? Or perhaps I’ve come to the wrong forum?

Hi 

I have not come across a deed of understanding and cannot find anything in relations to it.  
There is a memorandum of understanding, which is a type of agreement between two or more parties.  There are no tax implications on the transfer of sterling capital from one person to another.  
Once capital gains tax is paid, your partner can give you, your 50%, without any tax implications.  Your partner may have inheritance tax implications, as they were the legal owners of the property.  
Please have a look at the guidance at (How Inheritance Tax works: thresholds, rules and allowances). 

Thank you

Hi, thanks for the comments and think it must be the memorandum that I heard about. I just looked at the inheritance guidance but it’s not clear to me which bit might apply to my partner. They’re still alive so any chance you could give me a bit more info on what you mean?

Hi,

Please contact our Inheritance Tax team for advice:

Inheritance Tax: general enquiries

Thank you.