Jennifer Adams considers some important tax implications of swapping properties.
Swapping properties (HMRC generally terms this as ‘exchanging’ properties) can lead to various tax implications, depending on the nature of the transaction, the parties involved, and the types of properties being exchanged.
Typical examples include the scenario where two unconnected parties exchange properties that they each solely own. A further example involves two or more people being joint owners of two or more properties exchanging ownership, resulting in each owning one property (or possibly a division of a jointly held buy-to-let portfolio).
Capital gains calculation: Sole ownership exchange
Where two unconnected parties exchange land they each own in their own name, the exchange is treated as two separate capital gains tax (CGT) transactions. The gain is calculated
