Conveyancing Q & A October 2006
This article appeared in the Mearns Press in October 2006.
Question:
My 1930’s semi-detached villa has a wrought iron boundary fence with the adjoining property which is badly rusted and broken in parts. I do not believe it is safe. My neighbour, however, is elderly and disagrees with me saying it will do him whilst he is alive. What can I do? 
Answer:
Your title deeds will most likely contain provisions for the maintenance of your boundaries. Therefore it would be worthwhile having a look at these to see if maintenance is split equally between you. It is likely that the boundary will be mutual and therefore, in terms of your titles, repairs/replacements should be dealt with on a 50/50 basis. If your neighbour refuses to contribute towards the repair of the fence even after you have explained to him the terms of your titles, your only recourse would be to raise an enforcement action against him in court forcing him to contribute towards the repair of the fence. If your action is successful, then it is likely you would be awarded costs in connection with this action, however you would still have to pay initial outlays to your solicitor for raising the action which would run to several hundred pounds. In addition, such an action is likely to take some time and in the meantime you are still left with the problem of the fence. You must also remember you have to live with this neighbour and raising such an action is likely to destroy any relationship you are capable of having. This, in turn, would affect your enjoyment of your own property. Whilst not ideal, if your neighbour is unwilling to contribute to the repair of the fence even after you have discussed with him the terms of the title deeds, I would suggest you erect a new fence on your side of the wrought iron fence at your own expense. Whilst this may be more expensive than splitting the cost with your neighbour, it is still likely to be cheaper than raising a court action against him. This will also leave you on better terms with your neighbour than getting into a dispute with him in court which is unlikely to end satisfactorily for either one of you, even if you do get your new fence.
Question:
Do I have to pay Capital Gains Tax on profits made from selling my house?
Answer:
If the property you have sold is your principal private residence, then no Capital Gains Tax is payable on the profit made in your sale. If the property being sold is, however, a second home – for example, a holiday home or an investment property – then Capital Gains Tax will be payable on that part of the profit made which exceeds your annual exempt allowance, which currently is £8,800. If your property is in joint names with another individual, then both of you are entitled to an allowance and therefore the first £17,600 of profit would be exempt from taxation.
If the second property you are selling, however, was at some stage your principal private residence, then you can obtain a Capital Gains Tax Exemption for the entire period it was your principal private residence as well as the last three years of ownership. Therefore, if for example you purchase a new home, but your existing property takes longer than expected to sell or you have elected to retain your previous property for a short period of but you have already moved in to your new home, which is now your principal private residence, provided you sell the previous property within three years of moving to your new property the profit made on the sale of your previous house will be exempt from Capital Gains Tax. This is important to remember, particularly today with people marrying again following separations or indeed marrying for the first time later in life as it is more common for both parties to have their own property when they marry and therefore have two principal private residences to sell when they look to buy their new joint residence.
Article compiled by Karen Lang
Posted by Sharon Clift on Oct 17, 2006
