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Would there be tax to pay if we transferred a property to our son?

Question

A few years ago, we bought a flat in Sussex for my son to live in. As he was only just starting work we bought it in our name. We would now like to transfer it into his name when the five-year fixed period for the mortgage completes, so that he can take it on in his own name. Will there be tax implications (e.g. stamp duty land tax, capital gains tax) when we transfer it into his name? He has lived in the property as his main residence during the entire period of ownership.


Arthur Weller replies: 

Unless you can establish that your son had beneficial ownership of the flat until now (speak to a tax adviser), if you transfer it to your son now, there will be capital gains tax consequences for you, and stamp duty land tax consequences for your son. The fact that he has lived in the flat as his main residence during the entire period of ownership may help you in establishing that he had beneficial ownership until now (see HMRC guidance at www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg70230 (second bullet point)), but otherwise it will not help you.


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