Transfer of property - tax question

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    Transfer of property - tax question

    Hi,

    I am in the process of buying a property from an associate who bought a property a year ago and is moving away. I know he didn't pay any tax on the income whilst he had the property, so if I purchased the property would I be liable for any tax which was not paid by the original landlord?

    Thank you,
    R

    #2
    Income tax is due on rental PROFIT rather than rental INCOME - though, sometimes the two can be the same.

    Therefore, your associate might not have had any income tax liability.

    Unless the "association" was deemed to be a partnership, you should not have to pay his tax.

    Also, if you are "connected" to him in the tax sense, the sale price will be deemed to be at OMV (irrespective of the actual price paid). Connected usually means close family (and spouses) and businesses etc.

    Comment


      #3
      How is the associate linked to you ?

      If the property is a leasehold flat, your conveyancing solicitor should be making enquiries on the arrears of paying service charge ,ground rent and council tax for any vacant periods whilst waiting for a tenant.

      Payment of annual service charge and annual ground rent will be apportioned at the date of sale completion between seller and buyer.

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