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What is the tax position on the sale of a holiday letting?

Question:

I gifted half a property, which I rent out as a holiday letting in Devon, to my daughter. My husband and I own the other half. We want to sell now and wondered about our tax positions? 

Arthur Weller replies:  

Your gift to your daughter is a transfer at market value, so if the property has increased in value since you acquired it, this transfer will trigger a capital gain. Since you gifted it to her, there is no stamp duty land tax for her. When you sell your half to the third party, again, a capital gain will be triggered on your half if it is sold for more than the amount you paid for it originally. Both you and your husband should have the capital gains tax annual exemption (currently £12,300) to use against your capital gain, assuming you have not used it already in this tax year. 

I gifted half a property, which I rent out as a holiday letting in Devon, to my daughter. My husband and I own the other half. We want to sell now and wondered about our tax positions? 

Arthur Weller replies:  

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This question was first printed in Property Tax Insider in December 2021.