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Long term capital gains on sale of property

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nandan g

Dept Head

21 Points Posted on 25 November 2013

sir,

My father bought a flat in a co-op housing society in 1975 and nominated 4 sons as nominees.After his demise the 1st nominee became member of the society.Now we intend to sale the flat.Ideally the sale deed will be between the member & the buyer wherein the 1st nominee wud get the proceeds of the sale and wud invest in his name for Long Term Capital Gain and distribute between other nominees after 3 years.Is there any way out wherein all the 4 nominees get the sale proceeds from the buyer directly and they invest individually for LTCG. Kindly advice. Thx. nandan

Replies (1)

Mihir

Wealth Manager

5358 Points Posted on 26 November 2013

Nominee is not an sole owner, which means that nominee will be a care-taker, a trustee of the flat until a settlement is reached amongst the legal heirs. If there are 4 sons, then each is entitled to be 25% owner of the flat. They need not be proper members of the society. They may draft a settlement deed wherein they all agree, declare and confirm that all 4 sons are the legal heirs and rightful owners of the flat. If all 4 sons can wait longer, then they may even opt for succession certificate or letter of administration from the high court. Submit the settlement deed to the society. The remaining 3 sons may submit form 7 and become associate member of the flat. Upon sale of the flat, all 4 sons shall be beneficiary of the sale proceeds by entering their names in the sale agreement along with their 25% share. Each should receive the sale proceeds directly from the buyer or else the first member will have to alone bear full long term capital gain tax.