How should we divide ownership of our property?

I own an equal third share of a property in France worth £350,000 with my brother. We also own a third equal interest in a property in the UK worth approximately £750,000. One of the brothers wishes to purchase the entire French property by purchasing our remaining shares, with which all parties are happy. He proposed using his third share in the London property to do this.

Can he gift his share of UK property to the other brothers? In return, they would give him a third of their shares in French property. What are the legal and tax implications of such gifts?

George Coleman, a partner in the residential property group at law firm Withers, says the proposal to “swap” shares in properties is entirely possible. If your UK property is subject to a mortgage, the transfer process will be complicated by your need to obtain your lender's approval for the transfer.

But the tax aspect needs more thought. Let's start with the issue of stamp duty land tax (SDLT), which applies in England and Northern Ireland (Scotland and Wales have their own property transaction taxes).

HMRC considers you to be paying “non-monetary consideration” for acquiring a share in a UK property. The SDLT tax you and your brother will have to pay will be calculated based on the market value of the two-thirds share in the French property, although this represents an underpayment.

If there is a mortgage on a property in London and you will be liable for your brother's part of the loan, SDLT will also be due on your brother's share of it. Note that the total amount of SDLT payable on the value of the mortgage and the French property exchange combined cannot exceed the amount payable on the market value of the additional interest acquired in the UK property. If you own an interest in another property, the acquisition may be subject to an additional 3 percent SDLT charge.

Then there is inheritance tax to consider. Your brother will sell his one-third share in UK property at a price slightly below its value, which is in effect a gift from your brother to you both. This will constitute a “potentially exempt transfer” for IHT purposes, meaning it will be exempt from IHT if your sibling lives for seven years after the date of the gift. However, if your brother continues to benefit from the UK property, the value of the gift will remain within his taxable estate for IHT purposes.

Next, there is capital gains tax to consider. Assuming that the UK property is not your brother's principal private residence and its value has appreciated since the date of acquisition, the disposal of his interest would likely generate an immediate CGT liability. The liability will be calculated by reference to the market value of your brother's one-third interest in the UK property, and not by reference to the value of the non-monetary consideration he receives.

Furthermore, disposing of your share in the French property will also generate an immediate CGT liability for you, calculated by reference to the extent that the market value of your share exceeds the acquisition value, even if the actual consideration paid (your brother's share of the UK property) exceeds the value Logistics. The credit can be claimed to reduce the amount of CGT chargeable on French property to the extent that French capital gains tax is also chargeable.

It should be noted that your proposal is complex and fact-specific, and legal advice should be sought from both jurisdictions before implementing any proposal. This answer assumes that both properties are residential (and therefore exempt from VAT), and that you are all UK residents. The estate and tax treatment may also be completely different on the French side, so this must also be taken into account.

I am terminally ill, how can I arrange my affairs?

I am terminally ill, but my divorce has not been settled, even though it has been going on for years. I don't want to die before finishing it. How do I arrange my affairs quickly?

Dealing with a terminal illness, at the same time as you're dealing with a divorce must be very difficult, says Penelope Samuels, a wills lawyer at SA Law.

You will need to speak with a family law attorney (if you have not already done so) and a probate attorney. If they are from the same company, they can work collaboratively, which may help you navigate the probate and divorce process in a more time-efficient manner.

If you do not have a will, and a final order has not been made for your divorce, your ex-partner will be treated as your spouse under the law and will inherit your estate under the intestacy rules. Even if you want your ex to inherit your property, for example, for the sake of your children, it is still worth putting together a will to ensure that you have certain wishes about how the money will be used, such as for mortgage payments or education. They will be held in trust and protected through schemes such as trusts.

You should also keep in mind that your ex-spouse has the right to sue your estate for reasonable financial benefits similar to what he would receive in a divorce, if he did not similarly benefit from the will you wrote.

It's really important that you get a complete picture of your assets, what assets you own, what you would like to gift, how and to whom.

For example, this includes assets you hold in your name, assets you hold with your ex-partner, and your pensions. If you have gone through the financial settlement phase of your divorce, you may already have a good understanding of assets such as property, bank accounts, savings accounts and bereavement support payments under pensions and insurance policies.

Keep in mind that any savings in joint accounts with your spouse will automatically go to her. If it is in your name only, it will be considered part of your estate, so if you have made a will, you have the right to decide how you will gift it.

You will need to consider that depending on how you own it – i.e. under joint tenancies or joint tenancies – it will be treated differently under the law when it comes to your property.

If you have debts, these will be obligations to your property, but if you are a second cardholder on your husband's credit card, they will be his debts only.

If you are relying on treatments through a joint health insurance policy, it is important not to inadvertently put an end to it during the divorce process, as finalizing the divorce can have this effect.

Your will can also specify which relatives you want your children to live with, if you don't want them to be your ex. Ideally, this should be agreed with your ex, to prevent them discussing this after your death. A parent can override this wish alone, as they automatically have the legal right to care for their children.

If you name a guardian in your will, they will be able to make a claim to the court to care for the children if your ex objects to this. You can also put together a letter of wishes with your will explaining why you do not want your ex-partner to be the main carer for the children.

The opinions expressed in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors do not accept responsibility for, and exclude liability for, any direct or indirect consequence arising from any reliance on the responses, including any loss.

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