Gift of interests in the property

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Gift of interests in the property

Question:

I have a buy-to-let property, which I wish to transfer to my nephew over a seven-year period. Is there any tax liability (e.g. capital gains tax) to pay? Also, my nephew has not lived in the UK for five years; does this make a difference to his tax position? 
 
Arthur Weller replies:  
I presume you mean that you are going to transfer a part of the property each tax year. You need to calculate the capital gain on that part, using an (A/(A+ B)) calculation (see HMRC’s Capital Gains manual at CG12730 and CG12731), and if it exceeds the capital gains annual exemption (currently £12,000), you will need to pay capital gains tax (CGT). The CGT liability is on the donor (i.e. yourself), so your nephew's tax position is not relevant. 

I have a buy-to-let property, which I wish to transfer to my nephew over a seven-year period. Is there any tax liability (e.g. capital gains tax) to pay? Also, my nephew has not lived in the UK for five years; does this make a difference to his

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This question was first printed in Tax Insider in December 2019.