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Posted Wed, 14 Jun 2023 15:48:01 GMT by
I am a long term non-resident who has long owned an investment property purchased for say 100k in 1990. Its MV at at 6 April 2015 (the date on which CGT became payable for non-residents) is say 250k. Its market value today is say 330k - so just exceeding the NRB. For IHT purposes, I wish to transfer a residential property to a Trust for my adult child - it is just over the NRB so will pay the 20% IHT on the difference between 330k and 325k. If I understand correctly, the Trust acquires the "Purchase cost" and on a subsequent disposal is liable to CGT on the gain - so effectively the Capital Gain is held over. What is the "purchase cost" in case of a non-resident: Is it the original 100k purchase price or its MV as at 6 April 2015 when non-residents became subject to CGT. Can an election be made to apply the 6 April 2015 value? Thanks
Posted Fri, 16 Jun 2023 13:29:43 GMT by HMRC Admin 5
Hi

A claim to hold over relief takes the gain that would otherwise arise to the transferor and deducts it from the transferee’s acquisition cost for the gifted asset.
A non-resident who is entitled to re-base their cost at 6 April 2015 would calculate their gain as normal using that figure.
Then if a claim to hold over relief is made that gain would be deducted from the market value at transfer to arrive at the transferee’s revised acquisition cost.  
This has the effect of passing on the re-based 6 April 2015 cost rather than the original cost to the new owner.

Thank you.
Posted Sun, 18 Jun 2023 21:39:38 GMT by
Thanks for a clear and helpful answer.
Posted Wed, 24 Jan 2024 15:29:50 GMT by
May I ask a follow up on this? - Gift by non UK resident of UK residential property to a UK resident son. What is the situation if the transfer of the residential property is made to a son resident in the UK - and he then uses it as his PPR for say 5 years and then disposes it when its value has increases from 330k to say 500k So we have original purchase cost £100k 6 April 2015 valuation £250k market value at first transfer: 330k with gain of 80k (330-250) held over = > acquisition cost 330-80= 250k market value at second disposal 500k after 5 years' of use as a PPR => so a gain of £250k but the entire period it was a PPR. On what amount is CGT payable? - Finally, is there a difference in CGT treatment if the property is gifted directly or via
Posted Mon, 29 Jan 2024 08:30:29 GMT by HMRC Admin 19
Hi,

The initial gift would be seen as a sale of the property and be liable to Capital Gains Tax. The son, would not be liable as it is his main residence. You can see guidance here:

Capital Gains Tax: what you pay it on, rates and allowances

Thank you.

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