My brother and I own two properties in joint names: Property A (value £350,000; mortgage £90,000) and Property B (value £285,000; mortgage nil). Property A is my principal private residence; Property B is let out by my brother, but I don't receive any income from the rental. Now we want to go our separate ways and want to ensure we have a clean break. We are in the process of selling Property B and all proceeds will go to my brother. We will both transfer 99% of our respective share in each property to the other. For tax purposes, I will be subject to capital gains tax (CGT) for both the sale of Property B and the transfer of Property A ownership and was wondering if there was any way to reduce liability. The proceeds of Property B will go to purchase my brother's principal private residence.

 
Arthur Weller replies:
There are capital gains tax (CGT) reliefs when two people separate in circumstances similar to yours, but there are a number of conditions that go with these reliefs and the way that you have described your situation seems to preclude your being able to take advantage of these reliefs. You should not have any CGT on Property A, because your brother is transferring to you, it is he who has to pay the CGT. However, there will be CGT for you to pay on Property B, and the only relief available to you is the CGT annual exemption.