Capital Gains Tax on gifting property

enzo88

Hi all, just wanted a second opinion around Capital Gains Tax and whether I would owe anything in the following scenario:
I intend to gift/transfer a house to my brother and mother within months of purchasing another house.
For context, this house (to be transferred) is currently my main/only residence and I have resided here since 2013 with my brother, mother and my wife who recently moved here in 2020.
While the new house I will be purchasing will become my main residence, I will need a few months after the purchase of the new house to clear the mortgage on the old house before I can transfer it, so for this short period the old house will not be my main home.

Thanks all for any help/info.

Olinda99

You will not have to pay CGT on the gift of your main residence to your brother / mother if it is only a few months overlap.

You will have to pay the 3% extra stamp duty when you buy your replacement main residence but can claim it back when you sell your original main residence.

Keep_pedalling

The other tax consideration here is inheritance tax. If you were to meet an untimely death within 7 years of leaving the current property and it is worth more than £325k then some IHT would be payable on the gift and none of your transferable nil rate band exemption would be passed to your wife’s estate.. Even if it is not worth that much it would reduce the amount of transferable nil rate band to her estate considerable.

This risk is small but you might want to mitigate it through additional life insurance if you assets are significant enough for IHT to be an issue. 

canaldumidi

As above:

No CGT.

3% additional SDLT for 2nd property on purchase, reclaimable on transfer of 1st property (within 3 years).

Inheritance Tax on the gift if you die within 7 years.