Peter Prentice

Dear HMRC or anyone else who can help, Please could you provide clarity on this similar situation: We bought a flat for £300k in 1997 and it was my PPR until Dec 2014 when we relocated to Scotland and bought a house. It has been rented ever since then, but the value of the property has remained static at circa £1.3Mil for the past 10 years. Question: Will our CGT liability be zero if we sell the flat now, based on the fact that the value has not changed over the 10 years since we gave it up as our PPR? Or will we need to pay CGT based on 10/27 of the total £1mil gain since initial purchase in 1997? I am very much hoping the former will be the case, as we have a valuation for circa £1.3 Mil from 2014 when we were deciding whether to sell it or keep it for rental. With Many Thanks if you can help clarify our CGT reporting options, PHP

Hi, I have owned a London flat for 27 years. The first 17 years it was my PPR until I bought & moved to another house which then became my PPR. I rented the old London flat. I bought the London flat for £300k in 1997. It’s now worth £1.3m - so capital gain is £1m to date. If I sold the flat now, I would be liable to 28% CGT on 10/27 of the £1m gain = 28% x £370k = circa £103k. Question. If I gifted half of the flat to my 2 children now (before Oct Budget), would I be liable to pay the full CGT of £103k and would the overall Gain to date then be considered by HMRC to have been crystallised. Hence resulting in any future capital gain from the date of transfer being measured against the new crystallised value for both myself & my 2 children? Or would I only have to pay CGT of 50% on the gain to date, as I was only gifting 50% of the priority? I would much prefer to pay the full CGT now so that any future CGT liability to myself would be rebased against the current value of £1.3m, as I appreciate the flat’s value is unlikely to increase as much as it has done over the past 27 years. So much more economical for me to clear the full CGT slate now, whilst I’m only eligible to pay CGT on 10/27 of the gain. Hope this makes sense, and would appreciate any advice? Thanks.