I recently inherited a property from my mother (she died intestate and the property came into my ownership by deed of variation). The property is in need of extensive renovation and is currently uninhabitable. Her intention was for my two sons to inherit the property. If I gift the property to them in its current condition prior to renovation, would there be any capital gains tax (CGT) to pay? There has been no increase in value between my mother’s death and the current time although there would be an increase in value once renovation has been completed.

Arthur Weller replies:
Your acquisition cost, for CGT purposes, is the market value of the property on the day your mother died. That was the date you inherited. See HMRC’s Capital Gains manual at www.gov.uk/ hmrc-internal-manuals/capital-gains-manual/ cg31180. So if you gift the property to your sons in its current state, there would be no CGT to pay.