Father (F) decided to convert former commercial property into several individual properties. He decided that one of these would be given to his son (S).
The original proposal was that this would be gifted before any work commenced. The capital gain on F would be the pre-conversion value less original cost, and both sums were duly calculated. The gain would be reasonably modest. The costs of conversion of this property would then all be funded by S.
For practical purposes the conversion of all dwellings had to take place simultaneously. Unfortunately some legal complications arose causing substantial del;ays in the property being transferred into the name of S. The consequence is that when the property was eventually transferred to S the conversion had been completed.
Does this mean that the value gifted to S now becomes the open market value of the property which would, of course, include the 'profit' element of the conversion. If that were so then the capital gain on F would be increased considerably.
What do readers consider should be the disposal value for CGT purposes? If the OMV value then is there any way the convcrsion costs paid by S can be taken into account, but if not is the benefit of those costs lost completely?