The financial advisor of one of my clients has advised her to split the disposal of a property to her children over 4 years, transferring 25% of the title each year, so that she can take advantage of 4 annual CGT allowances (c.£44k). My question is, which of the following is right?
A. It's perfectly kosher
B. It's tax evasion
C. It's heavy-handed tax avoidance
The value of each annual 25% part-disposal would be adjusted each year to reflect the value of the totality of the property in each successive year. So the 25% gain in year one might be £45k, in year two it might be £50k, etc, and each year the client just reports in her tax return the 25% part-disposal capital gain less the annual £11k CGT allowance. This way she gains c.£44k CGT allowances over four years against the disposal of just one property.