Gifting to children

[Yiannis17]

Morning

If I may through two questions into this post.

I have a situation where a husband held a rental property jointly with his wife for 25 yrs or. There is no debt on the property. The wife passed away a few back so he inherited her share. He now wants to gift part of this rental property to his children. What would be the base cost of this transfer for the children?

In addition he now wants to transfer a share of his main residence. is it normal for the solicitors to questions this motive as they not making the transfer easy.

[AGoodman]

Assuming they were joint tenants (so not tenants in common), his base cost would be 1/2 the original cost plus 1/2 the value at his wife's death.

I would hope solicitors would query a gift of half the home. It is usually a pretty bad idea for tax planning unless the recipients are living with him (bad because he will lose PPR and the share will remain in his estate for IHT purposes). It also means he could lose his home if a child goes bankrupt or gets divorced and would need his children's agreement to moving home (plus his children could incur CGT on the move).

[maths]

On the wife's death husband acquires her 50% at its then market value. Husband's base cost is thus the aggregate of his original cost of his 50% plus his inherited wife's 50% at market value.

On him making a gift to children of all the property he will be deemed to have disposed at market value of the whole 100% at that time or if he gifts a proportion of the property then it will be the market value of that portion (a gift of a portion is for CGT a part disposal).

The above applies irrespective of how the property is held (ie joint tenants v tenants in common). Not sure as to AG's comment in this regard.

[AGoodman]

By joint tenants vs tenants in common, I just meant that if joint tenants, it's a guaranteed 50/50 split for tax purposes (saves me wittering on about the precise shares they may have held it in)

Exactly the same if 50/50 tenants in common.

[maths]

No-one likes a witterer.