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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I understand that gifts of assets including property between

Resolved Question:

I understand that gifts of assets including property between spouses do not incur capital gains tax and that the value of the asset once gifted is rebased to the value at the time of gifting. If so what happens if the spouse to whom the asset has been gifted subsequently sells or gifts the asset, in this case property?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
If the spouse then sells the tax is paid on the gain. Your spouse or civil partner may have to pay tax on any gain when they later dispose of the asset.
Their gain or loss will be calculated from when you or they first owned it.
The spouse that sells would not pay tax if their total taxable gains are above their annual Capital Gains Tax allowance.
Customer: replied 2 years ago.

Hi TaxRobin, I'm not sure what you mean so let's take an example. My wife owns a property (not and never has been the family home) Since she bought it it has increased in value by say one hundred thousand pounds. If she sells the property she has to pay capital gains tax on the hundred thousand pounds (minus nil rate band) but if she gifts it to me, her husband, there is no liability. Yes? OK say once I have received the gift I then gift the property on would the value of the property be based on the value at the time I received it, not the price my wife originally bought it for? Would my gifting trigger a capital gains tax charge for my wife's gifting? Basically I am asking can spouses by gifting property between themselves and then gifting it on to their children legally avoid capital gains tax? My concern is that if my wife gifts straight to the children that will trigger a large capital gains tax charge, then if she dies within seven years a massive IHT bill on top. We might as well set fire to the premises LOL!

Expert:  TaxRobin replied 2 years ago.
That is correct, if your wife gifts you the property there is no tax to pay at time of gift.
If you gift the property the value would be the amount when your spouse purchased. Your gifting would not trigger tax for your wife but for you at the time you dispose of the gift.
Your value is back when your spouse first purchased unless that was prior to 1982. You would then use the market value on 31 March 1982 instead.
If you gifted to children you would fall under the same 7 years.
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