Property Gifting to kids – Coveyancing, CGT, IHT, PET etc
I have a buy to let property which I converted into two flats some years ago. I now want to gift one of the flats to my son and for him to buy the other so as I can use the money received to gift to my daughter.
Is it possible to complete this transaction without me ending up,with a CGT bill and if there is one how much will it be.
I originally bought the property for 150k as one unit, each flat is now worth 200k, will my kids be liable for any tax assuming this transaction goes through.
Frank
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Member Since February 2011 - Comments: 3453 - Articles: 286
1:09 PM, 5th April 2015, About 11 years ago
Hi Frank,
Your question raises a huge number of financial, estate planning and tax issues that would be impossible to simply answer by anyone other than a professional in each field and with more information about all your circumstances.
To assist please see:
Tax- https://www.property118.com/landlord-tax/
Ownership restructuring for tax purposes and conveyancing- https://www.property118.com/conveyancing/
Estate planning assistance and financial advice- https://www.property118.com/member/?id=314
Member Since July 2013 - Comments: 303
5:19 PM, 5th April 2015, About 11 years ago
For CGT purposes you should be adding all the cost in relation to the conversion cost, drawing of leases etc.
Member Since June 2013 - Comments: 646 - Articles: 1
6:47 PM, 5th April 2015, About 11 years ago
try HMRC website.
Comments: 30
1:13 PM, 11th April 2015, About 11 years ago
Hi Frank,
You would need to consult a professional tax adviser so they can provide you with an accurate analysis of the costs of your proposed transactions.
From a CGT cost perspective the outcome depend on whether the any of the flats/house press conversion were your primary residence throughout the entire ownership period or part. Was it ever let?
From a IHT/PET perspective; the transfer of one of the flats to your son would be a PET and you would need to survive 7 years so that it doesn’t fall back into your estate. The gift of cash has the same PET conditions.
Will you be using any of the flats after you dispose of them to your son? If so, you need to get advice on how to mitigate any potential “gifts with reservation of benefit issues”.
Numerous tax rules will apply here. A tax adviser can give you a comprehensive analysis of your situation.