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Inheritance Tax Question

Wednesday March 2020

Q. I am thinking of transferring ownership of a rental property to my daughter to help reduce the value of my estate for inheritance tax (IHT) planning purpose. There will be no cash consideration given. What value is used for the gift and what are the CGT implications?

A. For CGT purposes, you are deemed to transfer to your daughter at current market value. So the difference between the market value and the price you originally paid for it will be your capital gain. You will be liable to pay CGT on the gain, even though you have not received any cash for it.

Note that different rules apply for stamp duty land tax (SDLT) – if you gift the property to your daughter for no consideration, there is no SDLT for her to pay.

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