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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My Father is signing his house over to my Sister and I on the

Customer Question

My Father is signing his house over to my Sister and I on the 10th April 2013. We would like to sell the property as soon as we can.

What are the tax implications if we sell within the same financial year, in other words,
what type of tax will we incur & how much will it be?

Thank you
[email protected]
Submitted: 4 years ago.
Category: Tax
Expert:  TonyTax replied 4 years ago.
Hi.

When a property is gifted to you by an individual who you are "connected" to for tax purposes which is the case with you and your father, it is deemed to have been sold to you at its open market value. That value becomes your cost for Capital Gains Tax purposes. If you sell it shortly after the gift, it is unlikely to have changed in value so there should be no gain on which you would be liable to pay Capital Gains Tax (disposal value less cost value). In any event, each of you and your sister will be entitled to exemption for the first £10,600 of your respective shares of any gain.

Assuming that the property has been your father's main residence for the entire period that he has owned it, any gain he is deemed to make by gifting it to you will be tax free.

You need to be aware of the pre-owned assets tax rules which you can read about here.

I hope this helps but let me know if you have any further questions.