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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am Kenya citizen, non resident in UK. My 4 children reside

Customer Question

I am Kenya citizen, non resident in UK. My 4 children reside in UK each owning their own property. 3 years ago I bought a property in London value £355k. I put it in the children's names. I now want to sell this property in order to purchase another. I am concerned about children's tax liability. I have requested lawyers to transfer title to me for nil consideration and will pay necessary land etc. taxes. If this happens what is position for my children re taxation.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

As I understand, your children already have a property each in their own name and presumably live in their respective properties.

This property in London would be regarded as their second home for the purposes of capital gains tax and the whole gain would be chargeable to capital gains tax.

If you transfer the title from their names to your name you are effectively taking ownership of the said property. For capital gains tax purposes, market value would replace any consideration before market value. You have suggested nil consideration.
If you sell a property to a family member/connected person at a discount, HMRC would regard it as being sold at market value for CGT purposes.

This would not help with their tax position. Say the property is now worth £455k. The gain for CGT purposes would be (455k-355k) £100k - £25k per owner.
Each would get gains allowance of £11k against their share of the gain and the balance(25k-11k) £14k would be chargeable to CGT at 18%, 28% or a combination of both depending of their total income in the year of gain.

I hope this is helpful and answers your question.

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