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Where Taxpayers and Advisers Meet

Gifted Property to son.

carleaton93
Posts:1
Joined:Tue Nov 20, 2018 10:28 am
Gifted Property to son.

Postby carleaton93 » Tue Nov 20, 2018 10:31 am

I gifted a house to my Son 8 years ago when worth £100,000. He has now decided to sell it. What sort of capital gains does my son have to pay?

Lambs
Posts:1611
Joined:Wed Aug 06, 2008 3:15 pm

Re: Gifted Property to son.

Postby Lambs » Tue Nov 20, 2018 10:40 am

C,

Generally speaking, the recipient of a gift will have a base cost equivalent to the market value of the asset at the date of the gift/receipt. That is because, despite the fact that the donor (you) gave the asset to him for no proceeds, HMRC is entitled to treat the transfer as being for that same market value.

In other words, you should have accounted for CGT on the gift 8 years ago, just as if you had sold it for its market value of £100k. Which is why your son can then work on the basis that the property "cost" him £100k: CGT has already been paid on that basis.

Your post does not say whether you did so or not; you might very well have paid CGT at the time of the gift. I mention it because this is an often-misunderstood part of the CGT rules: generally speaking, gifts are NOT CGT-free (except generally between spouses / civil partners).

With regards,

Lambs


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