My father has two rental properties in Bristol, and he wants to gift them to me (I am his only child). As I do all the maintenance and deal with all issues now because he isn’t able (he's in his mid 80s), can he gift them to me without me or him paying tax? Both properties are currently not rented and neither would sell easily (due to location, he'd maybe get what he paid for them), but they could be valued at more than he paid for them. My father possibly won't be into the inheritance tax (IHT) bracket as he doesn't have much, but he wants to see me get the properties while he's still living and see me do them up. What would be the tax position?  

Arthur Weller replies:  

If your father gifts these two rental properties to you now, the main tax that you need to be concerned about is capital gains tax (CGT). If the current market value is greater than what he paid for them, there will be CGT on the difference, at 18% or 24%, depending on his other income in the tax year. However, if it is true that the properties are not currently worth more than what he paid for them, you don't really have a concern. I suggest you get an independent valuation. As a gift, there will be no immediate IHT, but if he dies within seven years of the gift, the value of the properties will be included in his estate. Since he wants to gift it to you, there will be no stamp duty land tax for you to pay.