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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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If , for IHT purposes I gift my flat to my son who lives abroad

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If , for IHT purposes I gift my flat to my son who lives abroad in a country where there is no CGT, would I be liable here for the tax charge?

Are you referring to an Inheritance Tax or a Capital Gains Tax charge or both? Is he flat your main home or has it been so in the past? If so, has it been your home for the entire period of your ownership of it and, if not, has it been let.
Customer: replied 4 years ago.

I'm referring to CGT. The flat has never been my main home. It is rented out.


Leave this with me while I draft my answer.
Hi again.

Assuming you are UK domiciled, UK resident and the flat is in the UK, if you give it to your son, that will be a disposal for CGT purposes at the open market value. If that value is higher than you paid for it and the gain is more than the annual CGT exemption of £11,000, you will have a CGT liability in the UK regardless of there being no CGT regime in the country that your son lives in.

As you know the gift will also be a potentially exempt transfer for Inheritance Tax purposes and so long as you live for at least seven years after making such a gift, its value will not be included in your estate for IHT purposes.

I hope this helps but let me know if you have any further questions.
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