A property is transferred by V into the ownership of V and P in
equal shares subject to a subsisting mortgage.
P assumes liability for all or part of the debt.
Notwithstanding P’s actual liability, which is probably
for all of the debt, P is treated as assuming debt equal to 50% of
the amount owing.
This is because he is treated as owing none before the
transaction and 50% after it.
A property is owned by V and P in 70:30 shares.
It is transferred to the sole ownership of P subject to a
subsisting mortgage.
Assuming V is released from the debt or P agrees to indemnify
V there is an assumption of debt by P.
P is treated as assuming debt equal to 70% of the amount
owning.
This is because P is treated as owing 30% before the transfer
and 100% after it.
Although new sub-paragraphs (1A) and (1B) take effect from 22
July 2004 HM Revenue & Customs will apply the same practice in
dealing with transactions prior to this date.
