Transfer of Equity

Take an investor in property who has an income of £160,000 and a number of flats bought in the late 1990’s typically worth three to four times their original cost.

The investor wishes to make ongoing payments of £20k to charity,

Some of these flats have a higher rental yield than others and they wish to sell one of the lower yielding ones. 

Take one property that cost £50k and is now worth about £190k.

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Could they transfer a third of the equity in the flat they wish to sell each year to a charity?

Ideally to a body like the Charaties Aid foundation.   It is possible to transfer shares to this body which sells them and the giver receives tax relief .   They  can then use the proceeds to make payments to a charity of their choice.

Say the giver gave the flat to the charaties aid foundation in three steps.

So say transferring a third in March 2013 . Then a third  March 2014 and finally a third in April 2014.

So for this tax year and the following two tax years taxable income would be reduce by about £60k each.

In April 2014 the property would be wholly owned by the Charaties Aid Founation and the giver would be able to use the sales proceeds to give to charaties of their choice.

The goal beeing to use the sales proceeds of the flat to give to charity whilst getting income tax relief and avoiding CGT.