Gifting a property to my parents

[HomeAdvice]

I own a property and the mortgage is paid off and I would like to gift this property to my parents for no financial gain. The value of the property is under £250k. Am I able to gift this to them without any tax implications by transferring the deeds into their names?

[maths]

have you lived in the property and if so for how long and how long have you owned it?

[HomeAdvice]

I have owned the property since the 1990's and lived in it until 2000. My patents moved in when I left and have been there ever since. I live elsewhere due to work/relationship committments but this is the only property I own.

Thank you.

[maths]

Assuming purchase in say 1995 and lived in until say 2000 then if you gift it now 2011 you will be treated as if you have sold it for current market value and CGT may be payable on any gain.

EG
Original cost say 100K.
Market value today say 180K.

Chargeable gain = [8/16 x [180 - 100]] - 10,600 = 40K - 10,600 = 29,400.

CGT then 18% (or 28% depending upon you other income) of circa 30k = 5,400.

Unlikely to be any IHT liability unless you have made other earlier material gifts to others.

[Incredulum]

I have owned the property since the 1990's and lived in it until 2000. My patents moved in when I left and have been there ever since.

On what basis did they move in? Was it for life?

[HomeAdvice]

I suppose it is for life. I had no intention of selling and since they were moving it seemed the best option. 11 years on I see no reason to sell so I would like them to have the property. They have paid all associated running costs etc. I am trying to find the easiest way to transfer it to them with as little tax implication as possible, but must stress that I have no interest in any financial gain, otherwise I would sell.

Thanks for any advice.

[Incredulum]

I was just wondering whether in fact you gave it to them some years ago, but only now are you regularising the paperwork?

[HomeAdvice]

I guess this is open to interpretation. When they moved in it was always my intention to give it to them, and yes, only now am I getting around to the paperwork.

Thanks.

[pqtaxation]

.... When they moved in it was always my intention to give it to them, and yes, only now am I getting around to the paperwork.

Another, perhaps more accurate, possibility is that your intention in 2000 was to gift them the right to live in the property for the rest of their lives but upon their deaths, or their going permanently into care, you expected the property to revert to you unencumbered. If so, you gifted them an interest in possession and that is the position you may now be looking to document/regularise. That status does have the advantage that for CGT it benefits from main residence relief for you up 2000 and thereafter while they live there but for IHT it is considered part of their death estates (if you pre-decease them) and other aspects of the IHT treatment of such an interest in possession changed in 2008. Also if so and you were to pre-decease them, who would you wish to own the property following their deaths and do your and their wills reflect that?

[pqtaxation]

.... but for IHT it is considered part of their death estates (if you pre-decease them) and other aspects of the IHT treatment of such an interest in possession changed in 2008. Also if so and you were to pre-decease them, who would you wish to own the property following their deaths and do your and their wills reflect that?

Before the experts point out my sloppy wording extracted above, I agree (and apologise for it).

I was only raising the question about whether you intended to gift them the property outright (for them to pass on as they wish in their wills) or whether you intended it should revert to you on their vacating/deaths but what would happen if you pre-decease their death/moving into care?