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TaxRobin
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How does a Life Time Gift work; is it subject to CGT? I believed

Customer Question

how does a Life Time Gift work; is it subject to CGT? I believed it was tax free if you lived 7 Years and that there is a sliding scale of potential relief if you only live 5 years, for instance?
Submitted: 9 months ago.
Category: Tax
Expert:  TaxRobin replied 9 months ago.
HelloYes under Inheritance Tax, the original owner must live for 7 years after giving the gift. Any gifts made less than 7 years before death count towards the Inheritance Tax threshold (£325,000). They count towards the threshold before the rest of the estate.If the donor gave away more than £325,000 of gifts in their final 7 years, tax is due on everything over that threshold.The rate of tax is reduced for gifts over the threshold made between 3 and 7 years before the person died. This is known as ‘taper relief’.less than 3 years then tax you pay 40% 3 to 4 years then 32%4 to 5 years 24%5 to 6 years 16%6 to 7 years 8%Gifts are subject to Capital Gains Tax if you later sell shares or a property you inherited.
Customer: replied 8 months ago.
We're wanting to give our daughter 2/3 of the value of a property which was our 2nd home (she already owns 1/3) and now as you've explained the IHT situation (taper relief and all that), the question is, do we have to pay CGT on the difference of the value when we bought it, till now; at the time we make the gift?
Expert:  TaxRobin replied 8 months ago.
No . If you pass away prior to the 7 years then the amount goes back into your estate.

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