4

Say, as individuals, you are receiving money for a jointly owned asset, the proceeds of which you intend to split 50/50. The buyer wants a single account to send the money to.

Each of the sellers has a very different tax position. Neither of you has any wish to "optimise" the tax position by transferring all the money to the person who would pay least tax. But equally, they don't want to overpay by it all going to the other party. They want to pay as if it had been jointly, 50:50 owned.

The plan was to immediately transfer half to the one party once the whole amount has been received by the other.

Would tax authorities likely understand this as a single event for tax purposes, or would they be slightly more (trying to find a nice word...) "fastidious" about it all, and see each money movement as something with its own tax implications?

2
  • don't they have the concept of escrow in the UK?
    – littleadv
    Jan 12 at 16:34
  • 1
    @littleadv not really. You could go via a lawyer if really needed. Jan 25 at 9:33

1 Answer 1

5

This shouldn't be a problem. Technically speaking the person receiving the money would hold the other person's half "on trust" temporarily, but this isn't particularly relevant to anything if they immediately transfer it on.

The way the money flows isn't something you'd have to routinely declare and even if HMRC were to be aware of the details they are very easy to explain. If any capital gains tax declarations are required, each party can make the relevant declaration based on their own half of the asset.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .