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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have two properties which I rent out last five years

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I have two properties which I rent out for the last five years . I have two daughters and last year I put each of the properties into their names with the local solicitor. The transfer of the properties to their names was a straight forward change of ownership no monies exchanged no questions asked ! Now my accountant has said I must pay CGT on the sale of the houses when no monies have been involved ! Please how do I stand or can I put them back into my name ?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.
You gave away the properties to your daughters and these are not only disposals for Capital Gains Tax purposes even though you received no cash, they are gifts for Inheritance Tax purposes which wall fall out of your estate so long as you live for at least seven years after making the gifts. Take a look here for information on IHT:
https://www.gov.uk/topic/personal-tax/inheritance-tax
For CGT purpose, the gains on which you may have to pay tax are the difference between the disposal value and the purchase price. You can also claim the and buying and selling expenses such as legal fees, survey fees, stamp duty, selling agent fees etc and the costs of any improvements. I'm assuming neither property was ever your main home. Take a look here for information on Capital Gains Tax:
https://www.gov.uk/topic/personal-tax/capital-gains-tax
As far as reversing the gifts is concerned, I'm not convinced that HMRC will accept that the gifts never happened. The only way you will find out is to ask them but I wouldn't recommend that you do that. You should consult your lawyer to find out if he has dealt with a case where a gift of a property has been reversed. You could simply change the deeds again and hope HMRC never pick it up but you have the problem of the rents which need to be disclosed and you could end up in more trouble if HMRC do pick up the transfers of ownership and the reversal of those transfers.
I realise this is only going to confirm what you've already been told and so its not good news. Let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15763
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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