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Where Taxpayers and Advisers Meet

CGT on a gift

Posts: 12
Joined: Mon Apr 10, 2017 3:20 pm

CGT on a gift

Postby cliff99 » Thu Jun 27, 2019 12:15 pm

I have owned and rented out a buy to let for several years and during that period it has increased in value significantly. Our son is about to be married and I intend to gift him the property which will become the main home of he and his new wife.
My understanding is that there will be no stamp duty due as it is a gift, but am unclear on the CGT implications for me. Will CGT be due, as I will receive no monies for the property, but if indeed CGT is due is there any way this can be mitigated in the light of it being a marriage gift

Posts: 1091
Joined: Fri May 16, 2014 3:47 pm

Re: CGT on a gift

Postby AGoodman » Thu Jun 27, 2019 3:09 pm

correct re SDLt

You are treated as selling at market value for CGT so will make a capital gain, which will be taxed at 18%/28% after deduction of the £12k annual exemption.

Assuming no PPR, nothing much you can do to mitigate other than:

(a) if married, transfer half to your spouse first so that you benefit from 2 x annual exemption on the gift
(b) possibly consider transferring in stages (transferring part each year) to benefit from annual exemption each year - may be more trouble than it is worth.
(c) you could transfer into trust for your son with the benefit of holdover relief so no CGT. You would need to take advice on this. It may be possible for the trust to distribute it to him also with holdover relief at some point in the future.

Posts: 33
Joined: Wed Jun 19, 2019 5:04 pm
Location: Manchester

Re: CGT on a gift

Postby hendersontax » Tue Jul 02, 2019 11:52 am

You should also consider the Inheritance Tax implications of the gift as this would be a Potentially Exempt Transfer with IHT potentially due if you do not survive seven years from the date of transfer - and there would be no deduction for the CGT already paid. For IHT purposes there is an additional exemption when you are making a gift for a wedding or civil ceremony, but it is only £1,000 so unlikely to help much here!
Tom Henderson ATT(Fellow) CTA

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