Hi all, I have a client that currently owns a single property (no outstanding mortgage) that she lives in and has done throughout ownership. She is wanting to purchase a new home to live in but doesn't really want to part with her original home and instead wants to keep it and rent it out.
She has suggested to me that she could gift her original house to a friend/family member. There is no CGT as PPR exemption applied, and no SDLT for the giftee as no money has exchanged.
At this point she would be able to purchase a new home at the current basic SDLT rates at it would be her only property.
Then at some point after this, the friend/family member gifts the original property back to her. There would be little or no CGT (assuming the property hasn't increased in value in the short space of time between gifts) and no SDLT as again no money is exchanged.
This all seems too easy to get around the additional SDLT on second property. Is there legislation to avoid this?