I would like to know if I need to pay capital gains tax if I give my house to my sister. My house is only worth £75,000. It is my sole residence. I have lived in it by myself for 20 years.

Arthur Weller replies:
Since you are (a) giving away your house, and (b) the recipient is someone considered connected to you (i.e. your sister), tax law states that you are disposing of the house at today’s market value (i.e. £75,000). If this is more than you originally paid for it, perhaps 20 years ago, you are making a capital gain. But most likely there is no capital gains tax for you to pay because the principal private residence relief rules exempt you from paying tax on this gain since you have lived in this house as your main residence.