Please could you advise on the following scenarios? 

Scenario A 

If a daughter transfers a house in Bristol to her father as a gift (there is no ‘reservation of benefit’ for inheritance tax purposes), what tax would be owed? The house is valued at the same price as when she bought it, so there is no capital gains tax (CGT). But what about stamp duty land tax (SDLT) – is this payable on a gift? 

Scenario B 

Same question if a wife transfers a house (different house – not the same house as scenario A) to her husband (again, no reservation of benefit) as a gift. Is there CGT or SDLT to be paid on this transfer? 
 

Arthur Weller replies 

In scenario A, if the house is worth the same today as when the daughter acquired it, there is no CGT for her to pay, because she has made no capital gain. When the daughter gifts to her father, the CGT rules state that she is disposing of the property at today's market value. With regard to SDLT, if there is no mortgage on this property, the father pays no SDLT on the transfer. But if he takes over responsibility for an existing mortgage, then he is subject to SDLT according to the value of the mortgage.  

In scenario B, there is no CGT on transfers between husband and wife living together. It is called a 'no gain, no loss' transfer, and the recipient takes over the original base cost. With regard to SDLT, the same applies as in scenario A. However, the 5% SDLT surcharge for second properties does not apply to transfers between husband and wife.