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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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There, My mum wants to gift a property to myself and

Resolved Question:

Hi there,
My mum wants to gift a property to myself and my 2 siblings. It currently has an oustanding mortgage of c.200K GBP. The property is worth c.2mil GBP.
This is not her current primary residence but was c.10 years ago when we lived there for c.30 years. It is now split into 3 flats.
Can you please let me know if any CGT is applicable on transfer from mum to the 3 of us or just at the point we may choose to sell.
Many thanks
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Gain based on valuation at the time of transfer would be chargeable to CGT when your mum transfers the property to 3 of you . Your mum would claim private residence relief for all the period the property was her main residence.

More information on this subject can be found in HMRC helpsheet HS283 here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323679/hs283.pdf

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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Customer: replied 2 years ago.

Thanks. So with the transfer, CGT would apply to the 3 of us. When would it be payable and if we want to keep the property are we able to defer the CGT payment?

Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.

You are right that CGT would be payable by all three of you. You would be able to use your gains allowance against the gain and the rest would be subject to CGT.

You would declare the gain in your tax return in the tax year transfer takes place.. say if it happened in this tax year ending 5 Apr 2016, then CGT on the gain would be payable no later than 31 Jan 2017.

More information on this can be found here

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax


I am sorry to say you won't be able to defer CGT payment.

I hope this is helpful and answers your question.