My husband and his brother ran a pub for 33 years. They have now both retired and are drawing their pensions. We live in the third floor flat and the brother and his wife live in the second floor flat over the pub, which was on the ground floor; this has now been cleared out and is awaiting planning permission for residences. The brother is the sole owner of the entire building. He wants to transfer half of the entire building into my husband's name so that when it is sold, they each get half of the profit. What tax implications will my husband have? The property is valued at approximately £600,000. 

Arthur Weller replies:  

When the brother transfers half the building into your husband's name, for capital gains tax (CGT) purposes it will be treated in the same way as though he had sold it to someone at market value. Two brothers are 'connected persons’, so the market rule applies. See HMRC’s Capital Gains manual at CG14530. So even though, in actuality, it is a gift for no payment as far as the CGT rules are concerned, the brother will be deemed to have sold it to your husband for £300,000.