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Where Taxpayers and Advisers Meet

Tax on gifted property

dg8123
Posts:17
Joined:Wed Aug 06, 2008 4:02 pm
Tax on gifted property

Postby dg8123 » Mon Jun 07, 2021 10:28 am

Hi All,

I am looking for clarification on what taxes are likely to be due on a non resident gifting property to their child who is a UK resident and tax payer. From what I gather the gifter will need to cover CGT and the giftee will only be liable for future income tax on the rental income?

Thanks

Jholm
Posts:184
Joined:Mon Mar 11, 2019 4:22 pm

Re: Tax on gifted property

Postby Jholm » Mon Jun 07, 2021 11:04 am

Can you give more info regarding the property please? Is it in the UK?

dg8123
Posts:17
Joined:Wed Aug 06, 2008 4:02 pm

Re: Tax on gifted property

Postby dg8123 » Mon Jun 07, 2021 12:18 pm

No problem.

Residential property in the UK, no mortgage, currently rented out - hope this helps.

pawncob
Posts:4701
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Tax on gifted property

Postby pawncob » Mon Jun 07, 2021 12:28 pm

The only CGT due will be in the donor's country of residence.
Income tax on income derived from the property payable by new owner.
With a pinch of salt take what I say, but don't exceed your RDA

pawncob
Posts:4701
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Tax on gifted property

Postby pawncob » Mon Jun 07, 2021 12:31 pm

Ignore. Misread question.
With a pinch of salt take what I say, but don't exceed your RDA

dg8123
Posts:17
Joined:Wed Aug 06, 2008 4:02 pm

Re: Tax on gifted property

Postby dg8123 » Mon Jun 07, 2021 1:19 pm

The only CGT due will be in the donor's country of residence.
Income tax on income derived from the property payable by new owner.
Thanks. That is interested, I thought/assumed UK CGT would be due payable as non resident.

Jholm
Posts:184
Joined:Mon Mar 11, 2019 4:22 pm

Re: Tax on gifted property

Postby Jholm » Mon Jun 07, 2021 2:02 pm

Since it is a transfer (or disposal) or a UK residential property, UK CGT will be due even as a non-resident. Tax will be payable by the one gifting, based on the deemed proceeds being the value at transfer.

Look into the rules regarding base costs for non-residents as it is likely you will be able to use the market value at 6 April 2015 as the cost, thereby only accruing a gain on the value increase from 6 April 2015 to present. This may mitigate all CGT.

If tax is payable, an online 30 day return will be required and the tax paid within 30 days.

The rental income will thereafter be taxed on the owner(s) of the property, in line with beneficial ownership.

dg8123
Posts:17
Joined:Wed Aug 06, 2008 4:02 pm

Re: Tax on gifted property

Postby dg8123 » Mon Jun 07, 2021 2:24 pm

Great, thank you all for your help.

Looks like CGT is very favourable for those that are non resident, odd.


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