Putting House in Daughter's name-tax?

Dasa

We own a 2nd property which we lived in 20 years ago and rent out to some friends(yes it's declared to the IR). If we put this house in our daughter's name, being her only property are there tax implicatons for us/her? It would be a gift and no money would change hands.

Pennywise

It'll be subject to capital gains tax on you as if you sold it at market value. There is no exemption for a gift to a family member other than a spouse so normal CGT rules apply - i.e. deemed sale at market value to a connected person.

Dasa

Thanks Pennywise. Am I right in saying that as a married couple we still have a CGT annual exemption each.

zygurat789

Dasa wrote: »

We own a 2nd property which we lived in 20 years ago and rent out to some friends(yes it's declared to the IR). If we put this house in our daughter's name, being her only property are there tax implicatons for us/her? It would be a gift and no money would change hands.

It doesn't matter if its her only property, since if it's rented it could still generate a CGT liability.
So if you and your spouse give the house to your daughter there is a CGT liability on MV - cost - £22,200 and when the daughter sells it there is a CGT liability on Proceeds - MV on transfer - annual exempt amount, currently £11,100.
If it is bequeathed on second death and the estate is in excess of £650,000 the the IHT will be 40% of MV at death.
If the daughter lives in the house then the second lot of CGT will not be payable.
There is so much crystal ball gazing that it may well be best to pay what has to be paid when it has to be paid rather than provoking a payment in the hope that it will reduce future payments.

missbiggles1

Why do people always talk about putting something in someone's name rather than saying they're giving it to them? Don't they realise that it's the same thing?

Dasa

zygurat789 wrote: »

It doesn't matter if its her only property, since if it's rented it could still generate a CGT liability.
So if you and your spouse give the house to your daughter there is a CGT liability on MV - cost - £22,200 and when the daughter sells it there is a CGT liability on Proceeds - MV on transfer - annual exempt amount, currently £11,100.
If it is bequeathed on second death and the estate is in excess of £650,000 the the IHT will be 40% of MV at death.
If the daughter lives in the house then the second lot of CGT will not be payable.
There is so much crystal ball gazing that it may well be best to pay what has to be paid when it has to be paid rather than provoking a payment in the hope that it will reduce future payments.

Thanks. Being as she is going to get it anyway, trying to see if it is better to pay the CGT or the IHT.