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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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As a landlord I have agreed a property and would

Customer Question

As a landlord I have agreed a property for sale and would like to know can I put my son on the deeds to minimise my capital gains.Property is due to be completed on 30th June 2015.Tony XXXXXX

Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

Is this a property that has only been let and that has never been your main home?

Customer: replied 2 years ago.
This property has been let from 2000 and is registered in both my name and my wife's.We are both pensioners but we have 4 children,one is 25 and is unemployed but does not receive benefits..Can we save capital gains if we put our children on the deeds before completion.
Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 2 years ago.
Hi again.

If you simply want to put your son on the deeds but have him give you his share of the disposal proceeds after the sale that won't work. HMRC will say that there was never an intention to gift your son part of the property and for him to benefit from it.

If you do gift your son a share in the property such that he keeps his share of the sale proceeds, then that will be both a gift for Inheritance Tax purposes and a part disposal for Capital Gains Tax purposes.

IHT

Should you die within seven years of making the gift, its value will form part of your estate for IHT purposes as though you had never given it away. Take a look here for information on IHT and here for information on the tapering of IHT on gifts made in the seven years before the death of the donor.

CGT

A gift of a share of the property to your son will be a disposal for Capital Gains Tax purposes at the open market value for that share, ie you will be treated as if you had actually received the cash for that share. That may or may not leave you with a CGT liability but if you then sell the property shortly after the gift, that sale will give rise to a capital gain and you will be in the same position as if you had the sold the property without making a gift of a share of it to your son.

Of course, any CGT liability will depend on the facts and figures of the case. If the property was ever your main home, you will be entitled to some main residence relief and letting relief which will reduce the taxable gain. Take a look at HS283 for more information on the main home and CGT.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
I have just read that the first consultation is free but It appears I have been charged £36.Is it possible to get this amount refunded?
Expert:  TonyTax replied 2 years ago.
I have no involvement with payments so you will need to get in touch with just answer customer services from here to resolve that query.