Ask a planner answers: Gifting our property

Thursday, May 11, 2017

The question is from Catherine, 59.

Thinking about gifting our second property to our daughter. Understand CGT will be payable and will get it valued by RCIS surveyor. Will there be any problems if she later sells it after say 6months to a year and makes a profit?

Answer by Christopher Hill CFPTM Chartered MCSI, Tilney Financial Planning

Your daughter will inherit the property at its current market value. If the property then increases after this point and she sells it, she will pay capital gains tax on the gain that she has made, subject to allowances and her annual exemption. From an IHT point of view, it is the value of the property at the date that it is gifted that will remain in your estate for 7 years.

If the property has increased in value significantly within 6 months of the date of the gift, HMRC may question the valuation and this is where your valuation from your RICS surveyor will be of significant importance. This is only likely to be an issue if you were to pass away with 7 years following the gift or the value of the property exceeds the nil rate band.

Details of a financial planner close to you are available on cisi.org/wayfinder