My husband and I have two children, one is 16, and the other is six. We recently won a £5m house in Buckinghamshire. We want to gift the house to our children. Is it best to gift the entirety to our eldest when he turns 18, then he gifts half of it to his sister once she finally turns 18? Or should we gift half to our son first, then once our daughter turns 18, we gift the other half? Or as a third option, we could keep hold of it for the next 12 years, when our son is 28 and our daughter is 18, then gift the whole house in one go but split 50:50 between them. As we won the house, how do capital gains tax (CGT) and stamp duty land tax (SDLT) work? 

Arthur Weller replies: 

Regarding CGT, your base cost for this house is the market value when it was given to you (i.e., £5m). It appears clearly from your question that you want your children to own this house. There is no reason why you can't give it to them now. However, children under 18 cannot be legal owners of property in England. So, you will have to own it legally on their behalf, and they will be the beneficial owners. If you gift it to them soon after receiving it, before the house increases in value, there will be no CGT consequences. There will be no SDLT for your children because you are gifting it to them for no consideration. However, the question is, what is going to happen after you gift the house to your children? If the house is rented out, any rental income will be treated as your income until they become 18. If the family lives in the house, then regardinginheritance tax, this will have gift with reservation consequences.