Transfer of property between siblings

Transfer of property between siblings

8:42 AM, 16th January 2018, About 6 years ago 6

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Can anyone please assist with my situation? My sister would like to transfer a property as a gift to my brother and I, the property does not have a mortgage and was not purchased with one. The house has always been used as a rental property with a Private Rented Property License issued by a local London council. It’s currently undergoing an extensive renovation project and hence is empty until the work is complete, once again making it ready for the rental market.

My brother does not have a property in his name, but I am a house owner. I have been informed that we need to complete forms AP1, TR1 and ID1. Would there be any Tax implications since the transfer is via a gift with no monetary value?



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Neil Patterson

8:48 AM, 16th January 2018, About 6 years ago

Hi Tas,

If you are changing legal ownership you would normally use a conveyancing solicitor as if it was a purchase.

If it is a pure gift then it would be considered a Potentially Exempt Transfer (PET) for inheritance tax purposes. Therefore if your sister was to pass away in the next 7 years part of the gift would still be considered as belonging to the estate and there could be IHT to pay.

If you continue to rent the property you will also need to let HMRC know and complete self assessment tax returns.


10:56 AM, 16th January 2018, About 6 years ago

Yes, your sister needs advice. P118 could probably give it? I think previous poster missed out CGT?

Sister giving the gift will have to calculate CGT on MV and base cost to the recipients becomes MV, surely this is the most important point to note above IHT?

So if sister bought house for £100k many years ago, and if in London will be worth a fortune now, lets say MV is £400k, then you you have a taxable gain on disposal of £300k, give or take any CGT allowances and reliefs.

Therefore you really need advice, especially given the area i guess the property is located and the growth in values attached to that area.

Ed Tuff

13:34 PM, 16th January 2018, About 6 years ago



19:15 PM, 16th January 2018, About 6 years ago

If you give a property away or sell it undervalue to a connected person such as a relative, then it is deemed to have been sold at market value for CGT purposes. Therefore if reducing your estate for inheritance tax purposes by giving properties to your brother , you need to consider CGT at the same time. If you die, CGT is not chargeable.

Ant Homin

13:16 PM, 25th January 2018, About 6 years ago

Reply to the comment left by Sami Houmrani at 16/01/2018 - 19:15
Is it not possible for the property to be given away in stages to reduce the capital gain accruing in any one year.

Mark Alexander - Founder of Property118

13:22 PM, 25th January 2018, About 6 years ago

Reply to the comment left by Ant Homin at 25/01/2018 - 13:16
It is possible to transfer a percentage of beneficial interest in property annually. SDLT will become payable is the amount transferred exceeds £40,000 though.

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