IHT/CGT - Gift flat to son

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • IHT/CGT - Gift flat to son

    Hi all
    We never sold our flat when we moved, wishing to keep it to gift to our son or sell to fund a deposit/purchase of a home for him when the time came. We are in late 50s and hoping to retire in the next 5 years so are thinking of IHT/CGT planning. Can we gift him the flat outright, assuming we survive the gift-date by 7 years? What are the IHT/CGT consequences for us/him? We are looking at this as an option because we bought the flat for £26k in 1982 (and lived there till 2001) and it is now worth c £475k and we presume we could have a horrible tax bill of some sort down the line. Like others of our age, we hit a lucky break in the property market and feel duty-bound to transfer our good luck to the next generation. Despite this good fortune, we are not wealthy with lots of options open to us so any thoughts on how to make the most of this would be most welcome. Many thanks in advance.

  • #2
    If you gift the flat to your son you will pay capital gains tax on the difference between the market value at the date of gift and acquisition price.
    You will get PPR for the period you lived there plus the last three years. Are you renting out the property by any chance.
    There will be immediate charge to IHT, and provided you live for another 7 years there will be no IHT on your death.
    To avoid CGT, you could give him part share this year, and part share in following years.
    You should go to see a solicitor or tax advisor who specialises in IHT planning.

    Comment

    Latest Activity

    Collapse

    • Stamp duty rates for Limited Company
      klinka01
      A bit of background: I am interested in getting on to the buy-to-let property ladder, to give myself passive income on top of my daytime job. I intend to start a limited company so that I can save on some tax. As such, I will be buying any rental properties via the limited company.

      However...
      21-08-2017, 11:08 AM
    • Reply to Stamp duty rates for Limited Company
      jpkeates
      Yes, they're the same rates.
      The way they're accounted for can be different, though as a company doesn't have capital gains tax to account for.
      21-08-2017, 12:29 PM
    • Clarification on ATED
      klinka01
      Hi guys,

      Just needing some clarification regarding the ‘annual tax on enveloped dwellings’ (ATED). From what I understand, there is a charge of £3500/ year for limited companies owning properties worth >£500,000.

      For arguements sake, if I bought a property for £499,000,...
      21-08-2017, 11:38 AM
    • Reply to Clarification on ATED
      leaseholder64
      https://www.gov.uk/guidance/annual-t...-your-property seems fairly clear already, but the way I read it (as someone without a personal interest):

      1) Open market value. If you paid for it at full market value, from an independent...
      21-08-2017, 11:56 AM
    • Capital Gains Tax Query
      glyall
      Hello,

      I am looking for help with regards to a query about CGT.

      First off, the situation. I own a flat in Dundee. It's been my main and only residence since September 2013 (nearly 4 years). I am planning to move to Edinburgh to be closer to my girlfriend. She owns a flat 50-50...
      21-08-2017, 10:28 AM
    • Do I have to pay capitol gains tax?
      globularity
      I am currently living with my parents and have rented my flat out, this is the only property I own, and I lived there 12 years renting and 1 year as an owner. I am happy to move back in if this helps me to not have to pay capitol gains. Just read somewhere if its your principle home theres no capitol...
      17-08-2017, 22:13 PM
    • Reply to Do I have to pay capitol gains tax?
      Gordon999
      1. The calculation of capital gain starts from the date of purchase of your property up to date of your sale date. If you paid 100K and sold for 160K , then your capital gain is 60K. The capital gain during period of living at the property + 18 months after moving away is exempt from capital gains...
      18-08-2017, 15:04 PM
    • Reply to Do I have to pay capitol gains tax?
      jpkeates
      When did you buy it, between what dates did you live in it, rent it out and when do you plan to sell it?
      17-08-2017, 23:10 PM
    • Buying BTL and declaration of trust?
      bhodgkiss
      Hi there

      I'm buying a btl with my partner (not married)

      i believe we can do the mortgage under tenants in common (as opposed to joint tenants), then sign a declaration of trust to adjust the income split 99:1 (instead of 50:50). She's doesn't work.

      Is it that simple...
      17-08-2017, 06:22 AM
    • Reply to Buying BTL and declaration of trust?
      bhodgkiss
      Many thanks, yes I had read the bit about if one of us dies etc.

      Ok we'll go for the standard joint tenancy, as I believe we can simply draw up a document for her to get 100% income anyway from what's been said here (and other threads)
      17-08-2017, 15:45 PM
    Working...
    X