Gifting Property

I am reviewing inheritance planning options with my parents and looking into how best to handle a rental property they own. From what I understand they are able to gift this to me or my brother and this will not be included in their estate as long as one of them lives for another 7 years. Is this correct? If this happens does the value of this property still count against their £325,000 + £175,000 inheritance tax allowance? I've also looked into the tax implications of receiving a property as a gift for my brother and I and believe that there will be no Stamp Duty to pay as there is no mortgage on the property, is this also correct? Where I am less sure is regarding Capital Gains tax, if there is no payment for this property (gifted) is there still a capital gains tax payment to be made?

Hi,

If the property is jointly owned by your parents, they each may have a capital gain tax liability if they gift the property to you and or your siblings. If a gain arises, they each will have 60 days from the completion date to report and pay any Capital Gains Tax.

There is a capital gains calculator at:

Work out tax relief when you sell your home

If you own your home (or a share in it) your tax-free threshold can increase to £500,000 if: you leave it to your children (including adopted, foster or stepchildren) or grandchildren and your estate is worth less than £2 million.

You may wish to speak to inheritance tax regarding any inheritance tax implications

How Inheritance Tax works: thresholds, rules and allowances

Inheritance Tax: general enquiries

You may also want to review the guidance at:

How Inheritance Tax works: thresholds, rules and allowances - Overview

Thank you.

can i gift my property to my Son from overseas? any other points to note re residency Thanks

Hi Colin Walker,
If you are resident in the UK, then you may have UK Capital Gains Tax to pay on gifting the property to your son, no matter where the property is located.
If you are not resident in the UK and the property is located in the UK, then you may have Capital Gains Tax to pay on gifting the property to your son.
Tax when you sell property
Thank you. 
 

Hi, If both mother and daughter are non residents and not citizens of the UK, both reside abroad, but mother owns a flat in the UK which she wants to gift to daughter, will there be any tax owned by either of them after flat transfer? The flat was acquired by mother around 2016 and rented out on permanent basis since around 2019. Thx

Hi,

The gift would be seen as a sale and as not the mother's main residence, then capital gains would be due.

Thank you.

 

Thx for the answer! How long a mother would have to live in the flat in order for it to be considered her main residence and therefore no GC applied?

I want to give one of my property (no mortgage) current value of £150,000 as a gift to my brother and he will be using this property as his main residence, what if he decides to sell the property in 2 years? How much tax he has to pay for selling the property? and what are other tax implications? Thanks

Hi dustpine,

We cannot advise how long, but if the property is your mother's main residience for the entire period of ownership then there would be no tax payable. As you mother is not UK resident while owning this property, that will not be the case.  
The UK property would only become her main residence from the date she moves into the property. This would have to be declared in writing to HMRC.  
Private Residence Relief is the fraction of time the property is the main residence over the period of ownership, usually calculated in months.  
Have a look at the help sheet HS283:

HS283 Private Residence Relief (2024)

Thank you.

Hi Ajay Viki,
If he is using it as his main home, based on current guidance no tax is due.
However, you have Capital Gains  Tax to pay now when you gift the property to him.
Thank you. 

 

Gifting to a Joint Owner (sibling): My brother and I are Joint Owners (no mortgage) of a £380-400K, 1-bed London flat, which we received as a gift from our mother in 2008 (estimated market value then £240K). The flat is currently my main residence, and has been on and off for the last 8 years, and I have been responsible for all outgoings since we acquired the flat. My brother, never having occupied or used the flat for any purpose since owning it, now wishes to gift me the flat (£0 Premium) not least in recognition of me having spent 6+ years caring for my mother during which time I was unable to earn an income and my brother was able to continue with his career. I understand that there would be no Stamp Duty (SDLT) payable, and no Inheritance Tax (unless he died within 7 years of making the gift). What would the CGT liability be? And how would this change if I stopped using the flat as my main residence, and/or sold the flat within 2-3 years of becoming the sole owner? (We are both British, resident in the UK, and UK tax-resident; in our late-50s, no spouse or civil partner, no children)