Capital Gains Tax - Former Primary Residence

paulmcfadyen

I wonder if anyone has experience or knowledge of my situation:

I owned a flat as my primary residence from May 2000 until October 2005 ie. just over three years ago. I still own the property however in October 2005 I bought another property which has been my primary residence since that time. The flat has been let ever since and I have made a small profit via rental income.

I am now in the position that my brother will be living in the flat and I am gifting it to him with no exchange of money. The legal process for this transfer is almost complete.

I understand that as I moved out over three years ago, there is a CGT liability based on the value at the time of transfer to my brother.

Would the purchase price for this CGT calculation be assessed as the original price paid in May 2000 or the value at October 2008, ie. the end of the three year period during which CGT would have been avoided?

In addition to my CGT allowance, what other expenses or reliefs can be offset against my liability?

Thank you in anticipation!

saintalan

Any increase in value is deemed to have accrued equally throughout the period of ownership. So the % since October 2008 and selling (transfer/market value) will attract CGT.

However you will also be entitled to Letting Relief and your CGT allowance and unless it is of exremely high value I doubt any CGT will be payable.

Alan

fengirl_2

The gain will be the value at the time of transfer less the purchase price. The period from May 2000 to Oct 2005 is exempt. The period from May 2006 to May 2009 is exempt. The short period of chargeable gain during which it was let attracts letting releif of up to £40k, so I doubt whether any CGT is due.