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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5147
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am Swiss national, my dad is thinking to donate a land

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Hi, I am Swiss national, my dad is thinking to donate a land worth about 700k to me a my two brothers. The idea is to sell my part of the land to my brother to allow them to build on it. Can you let me know how the tax on Capital gain is calculated ? would it be taxed on the difference of value from when my dad inherited it and now or on the total value of the sale ? what would be the percentage of tax in the UK ?
Hello and welcome to the site. Thank you for your question.

CGT would be calculated on the gain made (in your case the difference between the value when land was inherited and now).

CGT rates are 18%, 28% or a combination of both depending on the taxable income, including the capital gain in the year of sale. There is a gains allowance of £11,100. You take this from the gain and the rest is taxed.

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.

Customer: replied 2 years ago.

Thanks, ***** ***** not sure if the donation have been taxed in Switzerland at the time would it make a difference if my dad did not pay tax at the time (i think that the low changed there)? Do you know if it is possible for brother to do donation to their brothers instead of buying the land, i understand that donation of £50k per annum are non taxable ?

Thank you for your reply.

If the land was to be gifted then it would be regarded as a potentially exempt transfer for UK inheritance tax purposes and the 7 years rule would apply to it. Basically, if you survive for 7 years after making the transfer/gift then the gift is out of scope of IHT irrespective of the value.

There is no gift tax in the UK. The recipient of the gift receives it free of tax.

More information on gifts and their implications on IHT can be found here

I hope this is helpful and answers your question. and other Tax Specialists are ready to help you