Capital Gains Tax and Income Tax

cooljulessss

thanks ceeforcat, the cost of improvements (does this include bits and pieces, eg. bits of wood, paint,etc) as well as big things like new boiler, fuse boards,etc

I have receipts for lots of things but not everything, but then would it not be classed as a business?

youngpensioner_3

Does anyone know the answer to my dilemma ?

I have owned a second property for approx 6 years and over that time I have rented it out. In the near future I would like to pat off the very small mortgage that exists and gift the property to my daughter as her first step on the property ladder. It's not an expensive property but has increased in value enormously since I first bought it. Is it possible to gift a property and if so would there be any capital gains tax to pay ? If this is the case then I wouldn't be able to go ahead as I do not have the funds available.

ceeforcat

youngpensioner wrote: »

Does anyone know the answer to my dilemma ?

I have owned a second property for approx 6 years and over that time I have rented it out. In the near future I would like to pat off the very small mortgage that exists and gift the property to my daughter as her first step on the property ladder. It's not an expensive property but has increased in value enormously since I first bought it. Is it possible to gift a property and if so would there be any capital gains tax to pay ? If this is the case then I wouldn't be able to go ahead as I do not have the funds available.

There are two issues here.

On the basis that you have never lived in it you will be liable for Capital gains tax on the difference between the purchase price (less costs of purchase) and the value at time of the gift. The fact that no money changes hands is irrelevant. It would be advisable to obtain a formal independent valuation on the property at that time.

The gift will form part of your estate in the unfortunate event that you pass away within seven years of the date of the gift.

youngpensioner_3

Thanks ceeforcat ! Just as I blummin thought ! I could just about find the funds to repay the mortgage but it would be just impossible to find the cash for the Capital Gains Tax that would be due. How do all these well off bods manage it :mad:. Must have great accountants and solicitors ! How about putting the house into a trust ? If all else fails I'll sell my house, go and move into the one I rent out for about 6-9 months THEN give it to my daughter ! Now someone's going to tell me I can't do that either :rotfl:

Cheers !