Advice on CGT please

[stevew02]

Hi,

I bought my first property in 1984 for £30k which I lived in. I moved into a larger house in 1998. Since then, I've kept the original house as my second home. I remortgaged the original property a few years ago. The mortgage is for £185k and the property is worth £250k.

I am considering my options a) sell the property and pay CGT between 1998 and 2012 b) transfer ownership/gift of the property to my son (are there tax benefits here?).

I would be grateful for any advice.

Thanks,
Steve

[maths]

I bought my first property in 1984 for £30k which I lived in. I moved into a larger house in 1998. Since then, I've kept the original house as my second home. I remortgaged the original property a few years ago. The mortgage is for £185k and the property is worth £250k.

I am considering my options a) sell the property and pay CGT between 1998 and 2012 b) transfer ownership/gift of the property to my son (are there tax benefits here?).

Presumably in 1998 if you continued to occupy two homes thereafter you made a CGT election favour of your later purchase?

Under (a) CGT will be payable on the capital gain of broadly [250 - 30] ie 220K less the exempt element of 17/28ths approx 134K less 10,600 leaving approx 76K chargeable.

The rate of CGT will be 18% and/or 28%.

Under (b) the same CGT consequences as under (a) arise. Potential IHT may arise if you died within 7 years of making the gift depending upon the availability of your nil rate band but thereafter it wouldn't form part of your estate on your death. SDLT may also be payable due to the attaching mortgage (unless the first time buyer exemption applies which may require that he buys it; need to check the fine print).

[Peter D]

Did you rent the property out at all. As math has indicated you are facing a CGT liability of £18,00 to £21,300 epending on your normal gross income in the FY of disposal. Regards Peter

[mullet]

I am considering my options a) sell the property and pay CGT between 1998 and 2012 b) transfer ownership/gift of the property to my son (are there tax benefits here?).

In terms of CGT there is no material difference between these two options.

[Peter D]

Sorry typo. £18,000 to £21,300 depending. Regards Peter