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Transfer of Property to Sibling
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AnotherJoe wrote: »Why repost? Didn't you like the answers you got before about your tax evasion scheme?
https://forums.moneysavingexpert.com/discussion/5644183
Thanks AnotherJoe, thought the numbers looked familiar but didn't quite make the connection.
OP, I was genuinely trying to help, but if you bothered to look I already answered this on your previous thread. So well done for getting a repeated answer but keep this up and people will stop bothering. I hope you realise that proving you are right on here by omitting / changing facts the second time around doesn't stop the potential HMRC enquiry for the tiny saving once you take yours and sister's tax liabilities with the multiple transfers.0 -
OP, I appreciate you are a new user but convention on this forum is that you should only open one thread on a topic. If you want to then post on the same thread and ask if anyone has further views (to bring the original thread back to the top page) that would be acceptable.
I have merged the two threads, so all users can now easily see all comments made. Please note that comments about repeating threads etc are now redundant and so some comments may not make sense to first time readers of this thread.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Capital gains tax on gifts is calculated for a fair market value of the gift. Not only is this how it works, unavoidably, but in this situation it's actually a better thing for you (aside from your whole scheme being a terrible way to avoid SDLT, as has been noted repeatedly)!
In this case, if you gift the property then you will pay CGT on the difference in value minus your allowance (11,300) - i.e. (D1-A)
When you sister gifts it back to you, she will pay CGT on the change in value since your gift, minus her allowance (D2-A)
And then when you finally sell it, you will pay CGT on the change in value since her gift (calculated from the sale price), minus your allowance (D3-A), assuming it's in a different tax year.
So the total CGT paid is (D1+D2+D3-3*A)
If gifts were rated as zero value for CGT, you would have no tax to pay on either of the gifts, but when you came to sell the property you would pay CGT on THE FULL VALUE OF THE PROPERTY (i.e. it's current value minus the value you got it for (zero)), minus your allowance, which means your total tax bill would be much higher - both because you end up paying on a larger amount, and because you would only get your allowance once!
I've had personal experience of this due to having assets in Poland which were gifted to me. Polish CGT operates with gifts having zero value. Luckily, Poland also has a tax exemption if you put the money in to your own residence within the EU (i.e. including the UK, for now), so I'm currently buying a house and using the money as a deposit. (I'm still liable for UK CGT, but that's judged on the market value so it's not too hefty)0 -
Thanks AnotherJoe - I am simply working out the best options and working out whats best for me. If you don't like it then don't post.
Oh I wasnt posting for your benefit, it was for the benefit of other posters who didnt realise they were wasting their time since you already went through this a few days back, and are now wasting other posters time.
Anyway I see your duplicate thread has been merged back.0
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