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Where Taxpayers and Advisers Meet

Can you fully gift a property?

Posts: 1
Joined: Sat Jun 08, 2019 11:58 am

Can you fully gift a property?

Postby jspence » Sat Jun 08, 2019 12:17 pm

Hi there,

Would really appreciate some insight before I approach any legal or tax professionals. My sister and I have just obtained an LPA for my father who has advancing Alzheimers. We want to transfer his 1 bed flat into our names so we can remortgage to release funds and reinvest so we can cover the rising cost of care and avoid IHT in the future. He has no other savings but owns the flat completely. Is there a way to gift a property without 'selling' it and transfer the title with Land Registry so it becomes legally mine and my sisters' and Dad effectively becomes a non-paying tenant? We both own properties of our own so this would become a jointly owned second property for us both. No one will ever live there apart from Dad and when he passes we will sell.

My question really is what does the normal 7 year IHT rule apply and are we subject to CGT upon receiving the property as a gift and as such, what are the SDLT implications of acquiring a property for which you haven't paid money for? :?:

Any input greatly appreciated with thanks :)

Posts: 3129
Joined: Sat Feb 01, 2014 3:26 pm

Re: Can you fully gift a property?

Postby bd6759 » Sun Jun 09, 2019 10:34 am

CGT is paid by the person disposing of an asset, not by person receiving it.

A gift is a disposal. The value of the asset is used to calculate the CGT.

CGT is not charged on the disposal of a property that was a persons main residence. So if your father has lived in the flat throughout his ownership, there will be no tax to pay.

The flat will still be part of his estate for as long as he lives there, unless he pays you a market rent and all of the costs that a tenant would usualy pay, You would then be liable to tax on those rents. It is rarely a good idea to do this. Seek bespoke advice, but if the flat is his only asset, is IHT really a concern?

Posts: 1023
Joined: Fri May 16, 2014 3:47 pm

Re: Can you fully gift a property?

Postby AGoodman » Mon Jun 10, 2019 10:40 am

You can't make a substantial gift under an LPA so it's a non-starter

Lee Young
Posts: 2671
Joined: Wed Aug 06, 2008 3:26 pm

Re: Can you fully gift a property?

Postby Lee Young » Tue Jun 11, 2019 11:49 am

If he only has a one bedroomed flat is IHT even an issue?
Lee Young
Solicitor, Chartered Tax Adviser and Trust and Estate Practitioner

Partner, Frettens LLP
01202 491701

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