Avoiding Capital Gains Tax

purdyoaten

zygurat789 wrote: »

Well purdy that's certainly going in with both guns blazing with the revenue case.
I'm sure that, on reflection, the OP would agree that a gift to his daughters in these straightened times would be the fatherly thing to do.
I'm sure that the reason the daughters never (directly) received any rental income was that they were not the owners.
If HMRC may wish to contend that the only reason for this gift was the avoidance of CGT but I feel they would have a hard time proving it.

Indeed it may well be HMRC biased - but only because I would be taking all steps to avoid any hint of justification of their case. There is case law I am sure on this or, at least, I recall recent instances before my retirement. While I take your point regarding the 'fatherly thing to do' but the op has very openly stated that the addition of his daughter's name on the property is specifically to save on CGT. The big difference in gifting to children before ultimate sale is, of course that CGT is payable as opposed to transfers to a spouse in the same manner. I still think that it is better to voice possible concerns even if they ultimately prove groundless.

Maybe I should stick to business taxation?

purdyoaten

Ne5555 wrote: »

can he sell all of it to his daughter between say -50000 -72000 and his daughter would sell it in one year +72,000 and if that was her main residence there would be no CGT to pay?
I believe there is no CGT on the residential property

Absolutely not! They are connected persons. The sale proceeds in the sale to the daughter must be equivalent to the market value at that time regardless of the amount of money that actually changes hands.

zygurat789

purdyoaten wrote: »

Indeed it may well be HMRC biased - but only because I would be taking all steps to avoid any hint of justification of their case. There is case law I am sure on this or, at least, I recall recent instances before my retirement. While I take your point regarding the 'fatherly thing to do' but the op has very openly stated that the addition of his daughter's name on the property is specifically to save on CGT. The big difference in gifting to children before ultimate sale is, of course that CGT is payable as opposed to transfers to a spouse in the same manner. I still think that it is better to voice possible concerns even if they ultimately prove groundless.

Maybe I should stick to business taxation?

There are, of course, always pros and cons and by careful choice of dates the tax liability in this case would appear to be avoidable.
It would be intolerable if we had a tax system which forbad parents financially helping their children.
I also noted that the OP isn't trying to avoid Inheritance tax.

zygurat789

purdyoaten wrote: »

Absolutely not! They are connected persons. The sale proceeds in the sale to the daughter must be equivalent to the market value at that time regardless of the amount of money that actually changes hands.

And if it isn't then HMRC will determine the market value and tax you on that.