He bought the first house for £50k now values at £200k. Instead of paynig CGT for £150k, he is thinking of transfering it to his daughter for £125k and pays CGT for £125k and she sells the house say after few months for £225k. because its her first house may be no CGT will be due.
Is it a good idea..any issues...
Thank you for any comments
Siva
siva
Replies (3)
Please login or register to join the discussion.
Circular arrangements
Remember that the daughter would be absolutely entitled to the proceeds in any case, and if money went back to the father, IR could ignore the transfer altogether. Also stamp duty would be payable in any case.
Although
just moving in for a couple of months purely to get the final 3 years relief may not be sufficient to to justify such a claim.
Not so easy
The sale to the daughter is deemed to be at market value, which you say is £200k.
A better option is for your client to go and live there for a few months (perhaps part-time)claiming PPR relief for the final 36 months ownership and possibly letting relief if he has owned it for more than 3 years.