My client, 5 years ago was gifted £150K cash (properly documented and a PET) by his father. My client buys a rental property, which is now worth £200K. The father now wants to move back to the UK and wants to live in the rental property, which he sees as his own because he had "paid" for it. My client is considering gifting the property back to his father. However, I have warned him that it would be a PET and that there would be CGT on the £50K gain with possible GWR and POAT implications. What would be your best advice?
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Accountants have to know their limitations. You have reached yours, so it's time to buy in the services of a capital taxes specialist.
What would be your best advice?
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Presumably, this happens a lot. I mean, Sift has its good reputation to defend, so it would always do what it says it will do.
"What would be your best advice?"
It would be interesting to know what your thoughts are.
This appears to be a can of worms waiting to explode, if you are not extremely careful. As one has suggested below (probably above), we all have to acknowledge our limitations.
My advice would depend on the circumstances ie
1. Your clients intentions and wishes
2. His fathers intentions and wishes
3. The family view on IHT and asset distribution
4. The father's potential estate
5. Trade off of PPR relief vs CGT on transfer
You name it, there is going to be a lot of meat to it to go through, with no one right answer at the end.
My advice would be get paid upfront!
Whatever the OP's client's father's expectations, and for whatever reason he has such expectations (I have my suspicions, but these are based on direct personal experience of that kind of thinking... I should not assume that my experience is relevant)....
Anyway, whatever his expectations, Daddy needs to understand that UK tax principles are in accordance with UK law. If he has no basis in UK law to a claim in the property (and you say the documents show he hasn't), then it follows that there are UK tax consequences to his proposals.
I think some form of counsel may be appropriate; I wouldn't be advising going to Counsel... but again, I'm risking making assumptions there based on personal experience.