CGT and SDLT on gifted BTL property

[djbolton]

I own a property (BTL) bought a couple of years ago, and its value has increased by approaching £10,000. If I gift it to my partner (we are not married) then as I understand it no SDLT is due (providing it's a gift and there isn't a transfer of mortgage liability over £40K). If it's my only disposal within the year and the gain is below £11,700 neither is there any CGT due, so the only cost is the Land Registry fees.
Once it's increased by another £10,000 or so, my partner can gift it back to me, again no tax implications.
So now I own it again having extinguished a potential CGT liability of around £20,000 at the cost of a few hundred pounds Land Registry fees.
I can't see this can be right, its too simple and obvious. Where is my logic going wrong?

[bd6759]

A gift, with the expectation that you will get it back, is not a gift.

[someone]

If there's a mortgage then it's not as simple as updating the land registry. The mortgage company (and solicitors) will have to be involved.

If there's no mortgage then you can do the transfer via a declaration of trust and save on land registry fees. (You can do it even if there is a mortgage but the mortgage company probably won't approve)

But it has to be a gift. If you split up after gifting then you don't and can't get it back.

[djbolton]

Re bd6759´s comment, if I give it away legally, and with no legal obligation to return it, then surely it's a gift. If in the fullness of time my partner happens to make a similar generous gesture to me isn't that also a gift? At what point can HMRC step in and disallow it?
And if in the fullness of time my partner gifted it not back to me, but to my daughter, What then?

[bd6759]

Re bd6759´s comment, if I give it away legally, and with no legal obligation to return it, then surely it's a gift. If in the fullness of time my partner happens to make a similar generous gesture to me isn't that also a gift? At what point can HMRC step in and disallow it?
And if in the fullness of time my partner gifted it not back to me, but to my daughter, What then?

Not if there is the expectation that it will be returned. The fact that you have set out the scenario in advance shows there is an expectation. If HMRC determine that that gifts from A to B to C and back to A were not gifts at all, A is left with the original price and has wasted money on the charade.

Paying a little CGT on the gain is better than losing the whole of your investment, which is what would happen if B or C decided to sell it and keep the proceeds.