Property inheritance tax and gifting property

xylophone

not sure of the implications but could my father not gift me the property and I essentially gift him the cash to give me brother he's 1/3

Have you read the link in my previous post 17 which itself links to
http://www.hmrc.gov.uk/cgt/property/calc-cgt.htm

cte1111

purdyoaten wrote: »

It is a property - not shares!

I know it's a property. The father currently owns a third of the house, e.g. 33.3%. He could therefore gift a ninth of his share of the house each year, e.g. 11.1%. This would achieve the aim of transferring the property to the OP and his brother, but maximise CGT relief by using his CGT limit over 3 tax years.

purdyoaten

cte1111 wrote: »

I know it's a property. The father currently owns a third of the house, e.g. 33.3%. He could therefore gift a ninth of his share of the house each year, e.g. 11.1%. This would achieve the aim of transferring the property to the OP and his brother, but maximise CGT relief by using his CGT limit over 3 tax years.

With respect you did say:

If so, he could transfer half of his shares to his spouse then they could sell the shares to you.

In any case, I can only imagine HMRC jumping all over your suggestion - selling 11% of a property in three consecutive years.

cte1111

purdyoaten wrote: »

With respect you did say:

If so, he could transfer half of his shares to his spouse then they could sell the shares to you.

In any case, I can only imagine HMRC jumping all over your suggestion - selling 11% of a property in three consecutive years.

I can see that my post wasn't that clear, hopefully it is clear now.

Why would HMRC be 'all over' my suggestion? They currently own the house in uneven proportions, they would continue to do so for a while. It's not illegal or in any way questionable to spread your disposals like this, just good tax planning.

CLAPTON

Biggie wrote: »

not sure of the implications but could my father not gift me the property and I essentially gift him the cash to give me brother he's 1/3

no

cgt occurs upon DISPOSAL

it doesn't matter whether he gives it to you or sells it to you

purdyoaten

CLAPTON wrote: »

no

cgt occurs upon DISPOSAL

it doesn't matter whether he gives it to you or sells it to you

Any thoughts on the previous post (25) (as in my short time here I see CGT as being a specialist area for you).

My long career in tax was mainly with business taxation. Nevertheless I have never come across an occasion where 'parts of a single property' were disposed of in different tax years to take advantage of multiple annual exemptions (shares and land by all means)

Happy to be corrected though.

cte1111

purdyoaten wrote: »

Any thoughts on the previous post (25) (as in my short time here I see CGT as being a specialist area for you).

My long career in tax was mainly with business taxation. Nevertheless I have never come across an occasion where 'parts of a single property' were disposed of in different tax years to take advantage of multiple annual exemptions (shares and land by all means)

Happy to be corrected though.

I'm happy to be corrected too, however I haven't heard you produce any evidence to do so.

The father and son own the property jointly now. I can't see any reason why the father shouldn't sell part of the property to his son. Whether he does it all in one go or in separate pieces is really irrelevant. In fact, it seems similar to the staircasing in shared equity properties. Are you suggesting that is also somehow against an unwritten tax rule?

As long as the disposal between connected persons rules are followed and the capital gain is listed on the father's tax return, HMRC are happy. The father is then perfectly at liberty to use his proceeds of sale how he chooses, including making gifts to both of his sons.

zerog

cte1111 wrote: »

The father and son own the property jointly now. I can't see any reason why the father shouldn't sell part of the property to his son. Whether he does it all in one go or in separate pieces is really irrelevant. In fact, it seems similar to the staircasing in shared equity properties. Are you suggesting that is also somehow against an unwritten tax rule?

Would this plan require a valuation of the house each year or will HMRC accept the OP's valuation in the first year

CLAPTON

zerog wrote: »

Would this plan require a valuation of the house each year or will HMRC accept the OP's valuation in the first year

of course the value of 1/3 of 1/3 of a house would be low