From: "Doug Ramage" 
Newsgroups: uk.finance
Subject: Re: CGT & gift to children
Date: Sun, 14 Nov 2004 11:31:22 -0000


"Ronald Raygun"  wrote in message 
news:tVsld.14029$up1.9665@text.news.blueyonder.co.uk...
> Doug Ramage wrote:
>
>> From: "Timbrook99" 
>>
>>> 3. What will it be, given that it will be a gift to each of them?
>>> Assume the house is valued at £300K today and was bought for £180k a
>>> few years ago (plse ignore taper relief etc).
>>
>> If the gain is deemed to be £120k, then this will apportioned among the
>> owners according to their respective shares. Each owner will have his/her
>> CGT liability calculated according to their own tax rate(s).
>
> To clarify further, if the £120k gain occurred during the present sole
> ownership, then of course if she were to keep half and give half away,
> she would only be taxed on £60k of gain.  To make best use of annual
> exemptions, it would be a good idea to make the gifts in chunks, and
> in different tax years.
>
>>> When the property is sold in a few year's time, how will CGT be
>>> computed for the various parties?
>
> Doug forgot to answer this bit.  I think the question was meant to
> refer to the donees' CGT liability.  When each of them eventually sells
> their share, their gain will be calculated by deducting the value of
> the share when it was gifted from the value when it is sold.  E.g. if
> the house is worth £300k when gifted, and 10% is gifted to relative X,
> this makes the donor liable for whatavere tax is due on a £12k gain.
> When (sorry, if) the house is sold a few years later for £330k,
> obviously X's share will be worth £33k and X will be taxed on a gain
> of only £3k.
>

I thought I had answered the donees' CGT liability part. :)
-- 
Doug Ramage

[Watch Spam Trap]