Share this content

GIFTING A PROPERTY

capital gains tax implications of gifting a property

Didn't find your answer?

A client has a number of rental properties and has now decided to give 2 of them away, one to each of his sons.  There are a number of considerations including PETs, capital gains tax and the filing of a property return within 30 days of the transaction.  Am I to understand that these would be classed as PETs (providing the client lives for 7 yrs) & there would be no need to file a property return as there is no consideration being paid?  With regards to capital gains, does this come into it at all? I would appreciate any comments

 

Replies (9)

Please login or register to join the discussion.

avatar
By Kaylee100
08th Dec 2020 16:30

In respect of the CGT question - sounds like Capital Gains Tax with proceeds at market value as they are gifts to a connected party (non spouse), so lack of any sale monies is irrelevant.

Thanks (1)
Replying to Kaylee100:
avatar
By Ashford
08th Dec 2020 17:34

Are you saying that because they are the clients sons, there is a capital gains tax implication, or there would be anyway no matter who he gifted them to? I tried to phone to agent's helpline and gave up after 30 mins on hold...

Thanks (0)
Replying to Ashford:
avatar
By Paul Crowley
08th Dec 2020 17:40

Different rules for Spouse
But connected parties need Market Value as deemed disposal proceeds

Thanks (0)
avatar
By Tax Dragon
08th Dec 2020 17:51

S18 and 17 TCGA 1992 and https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg66450 et seq

For IHT, most likely a PET but get someone else to look at the facts if in any doubt.

If your specialism is accounts and rental property accounts, tread with care if you are diversifying into giving advice on capital taxes. The one does not equip you for the other (my brain surgeon doesn't fill my teeth, to extend an analogy from earlier in the day).

Thanks (1)
Replying to Tax Dragon:
avatar
By Ashford
08th Dec 2020 17:56

Thank you for your reply. You are absolutely right about giving advice outside of my skill set. I have not offered any advice other than telling him he needs to make his own enquiries.

Thanks (0)
Replying to Tax Dragon:
avatar
By Tax Dragon
08th Dec 2020 17:57

Tax Dragon wrote:

For IHT, most likely a PET but get someone else to look at the facts if in any doubt.

Sorry I mean yes, as described it's a PET, but that does not exclude eg GWROB (or other possibilities if there are additional facts), get someone else to look at it if in doubt.

Thanks (0)
By penelope pitstop
08th Dec 2020 18:36

Once knew a solicitor who told his clients "no cash changing hands, no CGT problem"

Think he's been sued by umpteen clients for negligent advice.

Ashford - welcome to a highly dangerous area of tax planning!

Thanks (0)
Replying to penelope pitstop:
avatar
By Paul Crowley
08th Dec 2020 18:45

Agree that there are lots of Legal types who just should not talk about tax.
But no excuses for not knowing about the CGT 30 day rule.

Thanks (1)
Replying to Paul Crowley:
paddle steamer
By DJKL
08th Dec 2020 20:45

One would think conveyancing solicitors might be more on top of the details regarding the 30 day rule than general accountants as they must be dealing with far more such transactions.

Thanks (0)
Share this content