Our family property is held in the name one person, that is me. There is a memorandum of understanding between me, two brothers and our mother. Our shares are equal. 25% each.
We had two properties. One property was old in June 2016. The proceeds were invested fully in the current property. the construction stated in January 2017 and completed in January 2020. We had put the sale proceeds from the first property in a Capital Gains account with a bank which given us tax relief and used it for construction by providing bills while withdrawing from the account. All the funds were exhausted by December 2019 and construction completed in January 2020.
f we now decide to sell the newly constructed property in the next one or two years and want to divide the sale proceeds according the agreed ratio, that is 25% each, what will be the tax implication? Will the other 3 person also have to pay tax when they receive their share of proceeds in the family property? If we do not want to pay the capital gains tax what tax planning needs to be adopted?
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