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property sold in Tranches

How do we sort so multiple AE can be used

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A client of ours is looking at gifting a property to their son. We are considering performing this gift over multiple tax years to take advantage of the annual exemptions for those years.

Does the contract need to be constructed in a certain way to make this happen and not fall foul to anti-avoidance rules?

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By Tax Dragon
22nd Aug 2019 12:36

Contract? For a gift?

And gift or sale in tranches, per the heading?

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By Tim Vane
22nd Aug 2019 12:50

If the purpose of the fragmented disposal is to exploit the AEA then it almost certainly won’t work. Read CG18150P

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Replying to Tim Vane:
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By Tax Dragon
22nd Aug 2019 13:01

But that's not relevant to gifts - unless you are stupid enough to make gifts under contract.

As Wilson has already said this week, the idea can work but you need an affordable valuer, solicitor and accountant. Since you'll be consulting them (if you have any sense) every time you want to make a new gift, you could end up with fees (plus IHT... you're also prolonging the ToVs) in excess of the (CG) tax you would have paid.

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By possep
22nd Aug 2019 12:56

What sort of time scale are you looking at. If it was in stages each in excess of 6 years would that help?

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Jerome lane stewart and co
By Jerome Lane
23rd Aug 2019 09:49

you could get caught by CGT and SDLT (if there's finance involved) anti avoidance. Depending on what the property is used for, your client might want to consider business or Trust arrangements to manage commerciality and control.

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Replying to Jerome_Lane:
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By Tax Dragon
23rd Aug 2019 10:57

Did you have any specific CGT anti-avoidance in mind?

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