Avoid CTG by transferring 2nd Property to daughter?

susan.govier@ntlworl · Postby **susan.govier@ntlworl** » Mon Mar 29, 2004 3:16 am

I purchased a 2nd property for 67k in Feb 2003. I now wish to sell it at 120k. Can I avoid paying CTG by transferring it to my daughter (who lives with me) and if she then sells it? Is there any other way I can avoid or decrease the amount of CTG paid? The property is unmortgaged.

Nigel Lord · Postby **Nigel Lord** » Mon Mar 29, 2004 3:45 am

Susan

If you transfer the property to your daughter this will be treasted as a chargeable disposal at open market value for Capital Gains Tax (CGT) purposes as you are connected persons. Therefore, you would still have a CGT liability.

It occurs to me that if the property is a second home which is available to you as a main residence, then you could resolve the problem by making a Principal Private Residence (PPR) election, treating the second property as your main residence from the date of acquisition (this must be made within two years) and may then be varied back to you other property to protect it against CGT. As PPR relief is available in respect of the last 36 months of ownership this should eliminate the liability in respect of the second property.

If you would like assistance in making the PPR elections, please do not hesistate to contact us.

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk

Ian McTernan CTA · Postby **Ian McTernan CTA** » Sat Apr 03, 2004 12:40 pm

You must actually live in the property to be able to make the election...

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com

Nigel Lord · Postby **Nigel Lord** » Wed Apr 07, 2004 2:07 am

Ian

I thought that was inferred in my answer. (...if the property is a second home...)

Nigel