Cap gains tax on 99% transfer of equity
Discussion
H,
I Want to transfer 99% of a flat i own into my daughters name as a gift.
Not my home.
It was a buy to let.
I realise there will be cgt to pay.
Anyone know how to report the gain to hmrc?
I only find info about cgt on a sale on hmrc website.
Ive also just sold a other flat and made a loss for cgt on that one.
As i understand it that gets reported in the self asessment.
Any info much appreciated.
Thanks
I Want to transfer 99% of a flat i own into my daughters name as a gift.
Not my home.
It was a buy to let.
I realise there will be cgt to pay.
Anyone know how to report the gain to hmrc?
I only find info about cgt on a sale on hmrc website.
Ive also just sold a other flat and made a loss for cgt on that one.
As i understand it that gets reported in the self asessment.
Any info much appreciated.
Thanks
Once the property has been transferred, you will need to register here to set up an account and pay the CGT within 60 days.
https://www.gov.uk/report-and-pay-your-capital-gai...
You will be able to use the loss from the previous sale on the CGT form linked to reduce the tax due.
You will then need to include these sales on your self assessment and include the reference for the CGT paid above, so that the tax due from those transactions is NIL.
Edited to say that the gift is treated the same as a sale for reporting purposes.
https://www.gov.uk/report-and-pay-your-capital-gai...
You will be able to use the loss from the previous sale on the CGT form linked to reduce the tax due.
You will then need to include these sales on your self assessment and include the reference for the CGT paid above, so that the tax due from those transactions is NIL.
Edited to say that the gift is treated the same as a sale for reporting purposes.
The tricky question with any gift is "what's the gain?" and where there's no "price paid on the open market" this may require an RICS professional valuation.
There's also the question of whether apportionment of the "value" should be 99% and 1% or something different. You certainly can't, for instance, sidestep CGT by giving away a valuable matched pair of items one at a time.
Example:
Pair of matching Ming vases worth £20,000 as a pair
One Ming vase on its own only worth £5,000
If you sell someone one vase in May for £5,000 and the other in December for £5,000 your CGT should be calculated on the full £20,000 market value of the set and as opposed to 2 x £5,000 = £10,000
There's also the question of whether apportionment of the "value" should be 99% and 1% or something different. You certainly can't, for instance, sidestep CGT by giving away a valuable matched pair of items one at a time.
Example:
Pair of matching Ming vases worth £20,000 as a pair
One Ming vase on its own only worth £5,000
If you sell someone one vase in May for £5,000 and the other in December for £5,000 your CGT should be calculated on the full £20,000 market value of the set and as opposed to 2 x £5,000 = £10,000
I will have a CGT liability on the 99 percent i git.
However that will be offset by a loss on a nother property and other costs.
I found out that 'market value' is something that is 'negotiated' with hmrc.
I ill in cgt return using an estimated market value.
Then apply to hmrc to determine the true market value and updarte the cgt return later.
That's what i think is the process.
However that will be offset by a loss on a nother property and other costs.
I found out that 'market value' is something that is 'negotiated' with hmrc.
I ill in cgt return using an estimated market value.
Then apply to hmrc to determine the true market value and updarte the cgt return later.
That's what i think is the process.
"Valuation of assets.
"You must get a valuation of the asset at the time you made the gift and use this value in place of any amount you received for the asset – if it is a gift this would usually be nothing – to work out your gain or loss.
"You can agree the valuation with HMRC before you submit your tax return by completing form CG34."
https://www.litrg.org.uk/savings-property/capital-...
"You must get a valuation of the asset at the time you made the gift and use this value in place of any amount you received for the asset – if it is a gift this would usually be nothing – to work out your gain or loss.
"You can agree the valuation with HMRC before you submit your tax return by completing form CG34."
https://www.litrg.org.uk/savings-property/capital-...
philv said:
I will have a CGT liability on the 99 percent i gift.
Possibly. But if you were to try to sell your 99% without the other 1% who would want to buy it and how much would they be prepared to pay? What I'm saying is that giving away 99% of the legal ownership might give away only, say, 50% of the value.For this sort of tax planning I think it's always best to get paid professional advice. After all, what's the commercial rationale for retaining 1% of a gifted house? Also, if Mr HMRC comes around asking difficult questions about the arrangement you can hide behind your adviser...
For residential property there is an online submission for cgt.
It works it out or you.
You create a cgt account and then just do it for each property you buy or sell.
n the government's cgt online return, i have tried a few examples without actually submitting.
It does talk about 'market value'.
For selling a property received as a gift it says to use the 'market value'.
It also asks what percentage you own.
So simple and pretty straight forward.
(i wanted to check this for when my chils and i eventually sell).
Of course for transferring a percentage or gift.
It doesn't ask about what percentage you gifted away.
So im presuming you just enter the value of the bit you are giving away as 99 percent of the 'market value' and likeiwse for buying and transfrring and improvement costs.
Why that isn't clea lord only knows.
It's not easy to speak to someone in the cgt team.
I guess there all out walking the dog whilst working from home.
It works it out or you.
You create a cgt account and then just do it for each property you buy or sell.
n the government's cgt online return, i have tried a few examples without actually submitting.
It does talk about 'market value'.
For selling a property received as a gift it says to use the 'market value'.
It also asks what percentage you own.
So simple and pretty straight forward.
(i wanted to check this for when my chils and i eventually sell).
Of course for transferring a percentage or gift.
It doesn't ask about what percentage you gifted away.
So im presuming you just enter the value of the bit you are giving away as 99 percent of the 'market value' and likeiwse for buying and transfrring and improvement costs.
Why that isn't clea lord only knows.
It's not easy to speak to someone in the cgt team.
I guess there all out walking the dog whilst working from home.
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