lordlucan

Bought a flat with a friend as she was unable to get a mortgage on her own, the plan was she would live in the flat and rent my 50% from me.. We are nearing a full refurb and she has decided she wants to sell her half and remain in rented, dont laugh its because the lady has seen chavs in the area !!!

I plan to buy her out and rent the flat, as I own a house will I be liable for tax on any profits when I sell, hopefully in many yrs time. How would the tax man ever know ?

I heard if we can prove she has lived in the flat for a yr then we wont have to pay tax. Even though I will own the property I am happy for it to stay in joint names if it helps tax wise. The mortgage is in joint names.

What should I be looking to do to avoid paying any tax. What do I need to keep to prove she has lived in the property, ie do I rent it but keep the council tax bill in her name for a yr ? Have kept all the reciepts for the re-furb.

Thanks in advance
Jason