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What are the tax implications of property transfers between an unmarried couple who are separating?
My partner and I (cohabiting – not married) own our home and a holiday cottage as joint tenants. The properties are of similar market value of about £300 000 each and there are no mortgages or loans outstanding on them.
The holiday cottage was bought in 2004 for £175 000 and has been run as a business since. The profits and losses have been declared 50/50 on our self-assessment tax returns. We bought our home in 1999 for £160 000.
We now wish to separate both physically and financially. Rather than selling both properties and splitting the proceeds we propose to have one house each. I will transfer my half of the holiday cottage to my partner and similarly he will transfer his half of our home to me. The advantage is that this will save on estate agents’ fees and be quicker...
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