In this blog article, Beth Abbott from our Conveyancing team demystifies the term ‘Caveat Emptor’, the principles of which are key when buying or selling a new home. What does Caveat Emptor mean? Put simply, Caveat Emptor is a Latin term...
Multiple Sclerosis Sufferer Escapes £145,000 Tax Bill
A multiple sclerosis sufferer who was hit with a crushing capital gains tax (CGT) bill after the sale of land from which her husband’s business traded will be more than £145,000 better off following a First-tier Tribunal (FTT) ruling.
The woman had run a petrol station, post office and convenience store in partnership with her husband until she was struck by her debilitating illness. By the time the property was sold for £1.6 million, she had ‘washed her hands’ of the business, which had continued under the management of her husband.
HM Revenue and Customs took the view that she had a beneficial interest in the property and sought to levy £145,430 in CGT on a chargeable gain of more than £420,000. It was pointed out that the property was in the couple’s joint names and that the woman had signed the sale document as a beneficial owner.
However, in allowing the woman’s appeal, the FTT found that, by the time of the sale, she had entirely withdrawn from the partnership, which had effectively been dissolved. From the date of her retirement from the business, its accounts had been drawn up on the basis that her husband was a sole trader. In those circumstances, she had no beneficial interest in what had been the partnership property.