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Title Deeds: capital gains tax liability

AFTER 18 years we have just been advised that the Title Deeds for our house are now available. But I have just received a letter from the property developer saying that I have to contact previous owner about the tax. I don’t know where he’s living or if he’s even still alive as he went […]

AFTER 18 years we have just been advised that the Title Deeds for our house are now available. But I have just received a letter from the property developer saying that I have to contact previous owner about the tax.

I don’t know where he’s living or if he’s even still alive as he went back to the UK. If I can find him will he be liable for tax on the Title Deed, or will this delay us being issued the Title Deed? Our contract was deposited at the Land Registry.

I do not see that it is my responsibility to contact previous owner. Your comments would be appreciated.

Answer

I think I know what the problem is. Before the Land Registry will transfer ownership of the property to your name, they require proof, a ‘Tax Clearance Certificate’ from the Inland Revenue Department that any Capital Gains Tax owing on the property have been paid.

It’s the person who made the Capital Gain who is responsible for paying the Capital Gains Tax.

So when the property developer sold the property to the person from whom you bought it, the developer would have paid Capital Gains Tax on the profit he made. Similarly, when the person sold the property to you, that person should have paid Capital Gains Tax on the profit he made.

It is in your best interests to contact the person from whom you bought. It could be that he didn’t pay the Capital Gains Tax as he was supposed to. You could also try contacting the lawyer who acted on his behalf to see if he has any records of what happened.

But I’m afraid that if you don’t get anywhere, the only option will be to pay the Capital Gains Tax yourself. I know that it’s not your responsibility, and I know it’s unfair, but I’m afraid you may have no option. It’s the way the cock-eyed system works here.

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