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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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HiCapital Gains TaxI bought a second property 11 years

Resolved Question:

Hi Capital Gains Tax I bought a second property 11 years ago for my son to live in rent free and although he has now left the property my daughter and her husband now live there. They are looking for a new property so that we can sell the property I own now and move to a different area of Derby. Can I transfer the property into her name or put it into a trust for her, would I still have to pay CGT Please can you advise Thank you Regards ***** *****

Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

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

I presume you are referring to the second home that was used by your son initially and then by your daughter.

As this is a second property and has never been your main residence at any point, any transfer of this property into her name or into a trust for her would be deemed to have taken place at market value. Gain arising from this would be chargeable to capital gains tax, I'm afraid.

There is nothing stopping you from transferring the property as you wish but you should be mindful of CGT implications.

Although not relating to the question, you should also be aware of Inheritance tax implications of making a gift that is potentially exempt transfer.

More information on this is covered here

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/

I am sorry if the news is not what you were expecting.

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.

Expert:  taxadvisor.uk replied 2 years ago.

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Customer: replied 2 years ago.

Hi Thank you for your reply.

Do I have to use the highest valuation if I want to put the property into trust for my daughter.

I have received 2 valuations 110,000 and 120,000 thousand

I bought the property for 100,000 thousand and I believe that there is an exemption of 11,000 thousand so there would not be any CGT due on the lower valuation.

Please advise

Regards ***** *****

Expert:  taxadvisor.uk replied 2 years ago.
Diane, thank you for your reply.If you have received two valuations, I would opt for the one that is based on quick sale (it tends to be the lower of two).I hope this is helpful.
Customer: replied 2 years ago.

Hi So can I put the property in trust to my daughter at the lower valuation and how do I do this. Regards Diane

Expert:  taxadvisor.uk replied 2 years ago.

Diane, thank you for your reply.

You are best advised to consult a solicitor dealing with Trusts to make the necessary transfer. You can transfer at the lower valuation figure.

It should not be that costly an exercise but you should get it right.

I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

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