Member Since: 29th May 2009
12th Sep 2017
See Section 165 (2) (a) (11) TCGA1992 which covers your point. No other disposal is required.
You should also consider the IHT and CGT implications on the donor by reference to the future use of the property and the residence status of the done.
12th Sep 2013
Check out HMRC manual on the subject which states:-
Normal expenditure out of income: introduction
This exemption applies where the taxpayer can show that a gift (transfer of value) meets all three of the following conditions:
•It formed part of the transferor's normal expenditure (IHTM14241),
•It was made out of income (IHTM14250), and
•It left the transferor with enough income for them to maintain their normal standard of living (IHTM14251).
The exemption is given under IHTA84/S21. Part of a single gift may qualify for the exemption and the other part of the gift might be chargeable to tax or might be exempt under another provision.
The exemption does not apply to the following transfers of value:
•transfers on death,
•transfers on the termination of a qualifying interest in possession (IHTM04083) in settled property
Nor does it apply to transfers that are
•the payment of premiums on a life policy where these are linked to an annuity (IHTM14235)
•transfers of capital assets unless, exceptionally, these were purchased from income for the specific purpose of making the gift and they meet the other conditions