Capital Gains Tax on gifted property

[Dave2P]

Ok, trying to unravel a mess of someone else's making here, but would appreciate a quick opinion on the following situation :-

25 years ago, Father F bought a House and - for various reasons - put it in the name of his daughter D. The associated, interest only, mortgage was taken out in the name of the daughter D.

- Throughout the period, the mortgage payments have been made by F.
- D moved out of the House over 10 years ago, and has not lived there since.
- House is occupied by the family (F etc.) of D, and they are now estranged.
- Mortgage is about to be paid off, and D wishes to be shot of it transfer it to F.
- D has never owned any other property (and will not be buying in the near future).

So, if D gifts the property to F, is she liable to Capital Gains Tax on the difference between the original property cost and the current market value (regardless of the fact that no money is intended to change hands)?

If "yes", can this be mitigated and/or the liability for CGT transferred to F?


Many thanks in advance for your opinion, cheers.

[uknick]

Based on what is stated here, D may have CGT to pay.

Gain will be assessed as (transfer value, {deemed to be market value as connected parties [daughter/father]} less "selling" costs) less (purchase price + purchase costs + any capital improvements)

The full gain will be reduced for the last 18 months of ownership and the time D lived in the property as her main residence. This gain will then be reduced by D's annual allowance, currently about £11k.

[Ozzie Osmond]

I'm wondering whether there's an argument that the house was never D's at all. Perhaps her name was simply on the title deeds as nominee (trustee) for F, in which case there are no CGT implications for her.

The family would need to be able to convince HMRC.

[STattam]

S53 1 law of property act here may assist, when one is holding for another. Evidence Tha in writing and can claim main resi relief for the occupier. Sorty cant refer to post as on my phone.

[romeogolf]

Dave2P said:

Ok, trying to unravel a mess of someone else's making here, but would appreciate a quick opinion on the following situation :-

25 years ago, Father F bought a House and - for various reasons - put it in the name of his daughter D. The associated, interest only, mortgage was taken out in the name of the daughter D.

- Throughout the period, the mortgage payments have been made by F.
- D moved out of the House over 10 years ago, and has not lived there since.
- House is occupied by the family (F etc.) of D, and they are now estranged.
- Mortgage is about to be paid off, and D wishes to be shot of it transfer it to F.
- D has never owned any other property (and will not be buying in the near future).

So, if D gifts the property to F, is she liable to Capital Gains Tax on the difference between the original property cost and the current market value (regardless of the fact that no money is intended to change hands)?

If "yes", can this be mitigated and/or the liability for CGT transferred to F?


Many thanks in advance for your opinion, cheers.

If it can be proven to HMRC that F was the "rightful" owner of the property and it was his money which purchased the property, he who paid the mortgage, and he who will receive profit from the sale, then the CGT liability can be shown to be his. Get D to check with an accountant as it requires going back through a significant amount of paperwork, but can be done.

[Dave2P]

Thanks for all the replies everyone; from these and what we can find elsewhere it does appear that it's possible (for the GGT liability to go with the property) but HMRC need to be convinced... so (for the safety of D) they'd need to be convinced before the property is signed over. What fun...