Can we claim tax back on a transaction in 2016?
We sold a property to my daughter in 2016, paying tax based on a valuation and gifting her the remaining part of the value. We are now buying it back. Can we reclaim any tax paid on the full valuation?
Arthur Weller replies:
Answer: Unfortunately, you cannot reclaim any tax paid on the 2016 transaction. In fact, your daughter is deemed to be selling it back to you at today's market value, and she is subject to capital gains tax on the difference between today's value and the 2016 value at which she acquired it, if it has increased since then (less the capital gains tax annual exemption (i.e. £12,300 for 2020/21)).