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bigduckontax
bigduckontax, Accountant
Category: Tax
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My father purchased a property in December 2014. i have been

Resolved Question:

Hello
My father purchased a property in December 2014. i have been living in it since May 2015.
My father has never lived in it, as he lives abroad. The property is Share of Freehold.He is now thinking of giving me the property as a Gift. The property has gone up in value since it was purchased.
Would he be liable for Capital Gains Tax if he does?
Are there any other possible costs, or anything we should be aware of?
Could we do this on our own without solicitors, and if so, what would be the necessary steps.
My father is not a British Citizen and is not a UK resident.
Thanks
Sam
Submitted: 1 month ago.
Category: Tax
Expert:  bigduckontax replied 1 month ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Is this porperty his sole or main domestic residence? Does he own a house where he lives?

Customer: replied 1 month ago.
Hi,
No, he does not live in the property. It is the only property he owns in the UK. He owns the house that he lives in, which is in Egypt. But I live in the property.
Expert:  bigduckontax replied 1 month ago.

Right, so it is not his sole or main domestic residence for tax purposes. He will be liable for Capital Gains Tax (CGT), but only on the gain made on sale from an April 2015 valuation. He has an Annual Exempt Amount (AEA) of 11,3K to offset this. This will be taxed at a mixture of 18% or 28% or a combination of the rates depending on the gain. Egypt has no CGT regime so that is a relief.

I do hope that you have found my reply of assistance.

Customer: replied 1 month ago.
Ok, so if I understand correctly, you're saying he will only pay the capital gains for the period from December 2014 till April 2015, because I've moved into the house May 2015? Is that correct?Also, is there anything else I should be concerned about?
Who should I go to , to do this transaction, an accountant or property solicitor?
Expert:  bigduckontax replied 1 month ago.

No, you have it the wrong way round! The gain to be taxed is the difference between the net selling price ie after deducting selling costs including advertising snd the msrket value as at April 2015.

You can go to a solicitor or a property conveyance practitioner, but if this is registered land a land transfer form can me used for a very modest fee. Professionals can cost!

Customer: replied 1 month ago.
Ok. So if we were to do this today, the CGT would be for the gain between 19/10/2017 and 01/04/2015
I assume it's April 2015 not December 2014 when he bought it because it's the beginning of the tax year, or is this related to when I moved in.
Sorry for all the questions just trying to make sure I understand the answer.
Expert:  bigduckontax replied 1 month ago.

No it is entirely related to the UK governments decision to tax overseas organisations and persons on capital gains. If the sale were today the the difference between today's net selling price and the value as st April 2015 would be subject to tax less the AEA ie 6 April 2015 and 19 October 2017.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 month ago.

Thank you for your support.

Expert:  bigduckontax replied 1 month ago.

Thank you for your support.