Gifting a house to children - tax implications

Richard2012

It sounds like you are right! The questions laid out would point to me living at my partner's. Except the school part, as we haven't had children yet!

xylophone

http://www.direct.gov.uk/en/moneytaxandbenefits/taxes/taxonpropertyandrentalincome/dg_4020890
might be worth a look.

richbeth

Richard2012 wrote: »

Thank you so much, you've been a great help.

Anymore insight into what I'm looking at on the CGT front would be appreciated from anyone who has been in this position or may know.

And no, I have never lived there 'exclusively' I'm afraid.

Hi,
a friend of mine in this position just moved into the for sale house for a certain time period. I think it was 6 months but he took legal advice, it was genuinely his main residence therefore no CGT. I think you're going to be looking at ca£80-90k tax so if practical it's worth some inconvenience. Obviously if it's 500 miles from your place at work commuting might be a challenge
Richard

jimmo

Assuming you are neither married nor in a (same sex) Civil Partnership the fact that you live most of the time in your partner’s house will not affect your entitlement to Private Residence Relief in respect of the house you own.

Firstly, assuming that you spend most of your time at your partner’s house but that you also spend some time at your own, it is clear that you have 2 residences (places where you live)

http://www.hmrc.gov.uk/manuals/cgmanual/CG64435.htm

For Private Residence Relief purposes occupation is a requirement so it is vitally important that you do sometimes occupy the house you own.

http://www.hmrc.gov.uk/manuals/cgmanual/cg64465.htm

The next requirement is that you must have a financial interest in a property for it to be eligible for Private Residence Relief. So, whilst your partner’s house is, almost certainly, in general law, your main residence, the fact that it belongs to your partner implies that you have no financial interest in it. For the purposes of Private Residence Relief only, it is not your residence.

http://www.hmrc.gov.uk/manuals/cgmanual/cg64470.htm

For confirmation of the above take a look at the rules for 2 occupied properties, one owned and one occupied under licence.

http://www.hmrc.gov.uk/manuals/cgmanual/CG64536.htm

Therefore, for Private Residence relief purposes, the house you own is your main or only residence and, as far as I can see you have absolutely no worries about Capital Gains Tax but, as ever, the devil is in the details.

JimmyTheWig

richbeth wrote: »

I think you're going to be looking at ca£80-90k tax so if practical it's worth some inconvenience.

jimmo wrote: »

For Private Residence Relief purposes occupation is a requirement so it is vitally important that you do sometimes occupy the house you own.

But presumably if the OP did anything about it now they would still be liable for the CGT from when they acquired it to when it became their primary residence (i.e. now)?

For the amounts of money we're talking about, and the sufficient ambiguity, I'd say it was worth the OP getting paid advice. He could take all the facts and documents to show them and they could give informed advice rather than us here giving guesses. Anyone know who would be best for the OP to speak to?