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james bruce
james bruce, Solicitor-Advocate
Category: Law
Satisfied Customers: 5127
Experience:  Owner at James Bruce Solicitors
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If a property is gifted to a family member and that would

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Hi, if a property is gifted to a family member and that would become that family members first owned property. What would be the tax implications for then selling that property on?
JA: Where is this? It matters because laws vary by location.
Customer: England
JA: What steps have been taken so far?
Customer: None
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no

Hello I will assist you today,

Capital Gains Tax – on receipt of the gift, there will be no implications for CGT. However, when the person comes to sell or disposes of the property themselves by transferring or selling in the future, they will not pay CGT when they dispose of their home if it is their main residence and they have lived in the property for all the time it was owned. This is a tax relief known as Private Residence Relief.

Customer: replied 1 year ago.
Thank you your reply. Just to check I have fully understood.The family member who is doing the gifting has no CGT implications. We have resided in the residence the entire time and if gifted to us and we look to then sell, we are also exempt from any CGT. Is there any time scale from when the gifting occurs and any future sale which could impact this?I.e I know a different tax law, but if a gifting was made for inheritance tax purposes, the gifter must not pass away within 7 years of the gifting. Thank you kindly for your help

Hi, yes you are correct regarding IHT, there is a sliding 7 year rule. This does not apply to CGT.

With CGT, In most cases, you won't need to pay CGT when selling the property you live in, because you will be entitled to 'private residence relief'.

If the property is sold during the 2019-20 tax year, the you will not need to pay capital gains tax for the time it was your main residence, plus the past 18 months of ownership (even if you weren't living in the property during those 18 months). For property sales during 2020-21, this 18 months is reduced to nine months.

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