Two brothers each own their main residence in Coventry in their joint names. They had a family understanding that they would be 100% beneficial owners of the property they reside in. They now wish to formalise by transferring their respective shares to each other in the two properties so that they each own the main residence in their names. Can they now prepare a declaration of trust of the family arrangement declaring the beneficial ownership, and transfer the properties without incurring any stamp duty land tax (SDLT) or capital gains tax (CGT)? 

Arthur Weller replies:  

If you look at HMRC’s Capital Gains manual at CG65155, you can see they can transfer their half ownership in the other house in exchange for receiving the other half of their own house without incurring a CGT liability. If you look at HMRC’s Stamp Duty Land Tax manual at SDLTM04030a, you can see they can do the same thing without incurring an SDLT liability. I am assuming that both properties are of a similar value.