I own a property in the Midlands, which is worth about £500,000. The outstanding mortgage is £240,000. Can I gift this property entirely to my brother-in-law, and if so what are the tax implications on me and him?
Arthur Weller replies:
There are no direct implications on your brother-in-law (except that: (a) his estate will be increased by £500,000 for inheritance tax (IHT) purposes; and (b) if he now wants to purchase a residential property, he will have to pay an extra 3% stamp duty land tax because it will be his second property). The tax implications on you are: (a) if the property was worth less than £500,000 when you acquired it, you will have to pay capital gains tax on the difference; and (b) if you do not live for seven years after the date of the gift, the £500,000 will be included in your estate for IHT purposes.