Lee Sharpe considers a recent tax case that may be of use to taxpayers whose family or friends have helped out with buying property.
It is a common theme of direct tax law that the tax follows whoever is entitled to benefit, be it from the income in question, the use or enjoyment of an asset, or the proceeds arising from disposal. From a capital gains tax (CGT) perspective, HMRC’s Capital Gains Manual states at CG10702 (and echoed at CG10720):
‘The person chargeable is normally the `beneficial’ owner of the asset which has been disposed of. Any actions by nominees, bare trustees, [mortgage holders, etc.], are attributed to the beneficial owner so that any gain or loss accruing on an actual disposal of the asset by the nominee, etc., accrues to the beneficial owner (and not the nominee). The transfer of legal ownership between a nominee and the beneficial owner does not constitute a disposal for the purposes of TCGA
