How to pass on our properties equally to our children: gift or sell cheaply?—Financial Times
Russell-Cooke private client partner has responded to a reader's question in the Financial Times, posed by a couple who have paid off two properties of varying worth seeking advice on how to distribute them equally among their children through gifting or selling. Exploring tax implications such as Inheritance Tax (IHT), Capital Gains Tax (CGT), and Stamp Duty Land Tax (SDLT), Rebecca outlines the complexeties and key considerations involved in intergenerational property transfers.
If you have lived in your home since you bought it you will qualify for principal private residence relief (PPR). If PPR applies then there would be no CGT on either a sale or gift of your home to your children. This should be contrasted with the second property. It is important to note that if you sell the property at a low value this will be considered part sale, part gift. CGT would still be assessed on the market value of the interest you transferred or sold at the date of the transfer. The CG rate is 28 per cent on land and buildings for higher-rate taxpayers."
The full article is available to read online at Financial Times, by subscription only.
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