Tax implications of gifting a property to my daughter
Question I want to transfer a property in Liverpool to my daughter to help my inheritance tax (IHT) planning. What value is used for the gift? There will be no cash consideration given and the property is a buy-to-let property which my daughter has been managing for me for some time and I now feel that now is the time to transfer the property to her. Will the market value be used for capital gains tax (CGT) and stamp duty land tax (SDLT) purposes? If the property was purchased 30 years ago for £30,000, is that value used and then my daughter takes care of any gain in years to come when she sells the property?
Arthur Weller replies:
For CGT purposes, you are deemed to transfer to your daughter at today's market value. So the difference between the market value and the £30,000 you originally paid for it will be your capital gain, and you will have to pay CGT accordingly, even though you are not receiving any money from your daughter. As for SDLT, different rules apply. If you gift the property to your daughter for nothing (i.e. she doesn't pay anything) there is no SDLT for her to pay.
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