Dad gifting his house to daughter

betsy123_2

What tax charges will me and my dad incur if he gifts me one of his rental properties?

Pixie5740

If your father gifts you a property that is not his main residence then he might have to pay Capital Gains Tax on the market value of the property.

You won't have any tax to pay although if you continue to let the property out the rental income could be subject to income tax.

Guest101

He'd be liable for capital gains tax i believe. Outside of that, it could be deprivation of assets, but really that's to some degree dependant on his age.

betsy123_2

It isn't his main home.

He bought the house for 30k it's now worth 150k but I want to buy it for 100k. How much tax would he pay?

Pixie5740

See: Work out your capital gains tax

166million

Better not be my house

Guest101

betsy123 wrote: »

It isn't his main home.

He bought the house for 30k it's now worth 150k but I want to buy it for 100k. How much tax would he pay?

Just so you know, capital gains is done on the value, not what you pay for it.

Also your question is gifting, not your buying. So which is it? Since a solicitor may have additional money laundering questions (not end of the world) etc

xylophone

This will be a sale at undervalue - best consult a solicitor.

http://www.gillespieandanderson.co.uk/cms/filelibrary/Key_features_of_capital_gains_tax.pdf

"Disposals
The term ‘disposal’ is not defined and is construed as having a wide scope. It includes an outright sale to a third party, as well as sales at an undervalue and gifts.


Therefore, if a parent makes a gift of an asset to a child, the gift is a disposal chargeable to CGT. Further, where there is a disposal and the transaction is not made on a commercial basis, then for the purpose of calculating the capital gain the market value of the asset is used instead of the actual disposal proceeds.

• Market value is always substituted on a disposal between individuals with a close connection, such as close relatives.

• So, for example, if parents sell a holiday cottage to a child for £50,000 at a time when it is worth £120,000, the parents’ capital gain will be calculated as if they had sold the property
for £120,000."

bris

First it was a gift, now it's a cheap sale, any other story to add?

betsy123_2

Don't think there's any need for the attitude.

I want to know which way is best for him to gift it me or me to buy it

Pixie5740

betsy123 wrote: »

Don't think there's any need for the attitude.

I want to know which way is best for him to gift it me or me to buy it

As already explained several times, in terms of CGT is makes no difference as CGT will be calculated on the market value of the property not a value of zero (if he gifts it to you) or whatever below market rate you pay for it.