CGT on a gifted property

ronniescot

Good afternoon.
I have searched online and found lots of information about the tax implications for the donor of a house but not the donee.  
Six years ago I gifted my main residence (a two bed flat) to my daughter before I re-married and moved in with my new wife to be.  My daughter used the flat as a buy to let but now wants to sell it to buy a house to live in.  My question is whether my daughter will have to pay any CGT on the sale of the flat?  To me it would seem unfair if she was liable to CGT on the entire value of the flat.  

Keep_pedalling

She will only have CGT liability on any increase in value of the property since you made the gift, not the entire value of the flat. She also has an annual allowance of £12,300 so if the gain is below that there will be no tax to pay.

uknick

The value she will use as her purchase price is the market value at the time you gifted it to her.

ronniescot

Thanks for the encouraging answers.  I am not sure how you would know the market value at the time of the gift because it was not appraised.  I suppose I could use the average house price increase in the area over the period.  It sounds complicated.  But much better than the prospect of paying CGT on the whole value.

Jeremy535897

One option is for her to ask an estate agent to give her a valuation at the relevant date, although this will cost a modest sum. However, if it was in a block of flats with several almost identical flats, she could use the internet to find what they were selling for near the date of the gift. HMRC can always challenge a valuation, so keep the evidence used as the basis of the calculation.

Keep_pedalling

She really needs to obtain a professional valuation from  RICS surveyor, a freebie  from an estate agent is not good enough. 

Jeremy535897

Keep_pedalling said:

She really needs to obtain a professional valuation from  RICS surveyor, a freebie  from an estate agent is not good enough. 

I said "for a modest sum". Estate agents employ such valuers and will typically charge £100 to £250.

nanoAccountants

The Doner is always the person who pays the CGT, however in your situation if you have lived in the property for the entire period then the initial transfer was exempt from CGT and therefore the market value at the time transfer would be your daughter base cost which she will need to use when she sells the property. 
You will need an offical valuation from a RIC surveyor as HMRC are unlikely to look at an estate agents estimate. A RIC surveyor will have all the figures and calculation. Some actually specilise in valuation for tax purposes.