Inheritance Tax

No, you do, just as you would if you were selling it to her (or indeed to anyone else) at market value. Has this house ever been your main residence? If so, this would reduce your CGT bill.

Alternatively, don't give it to her all at once. Give her, say, a quarter share this tax year, and another in each of the next three. This would make best use of your annual CGT exempt amounts.

Do you have a wife? You could gift her half the house tax free, and then each of you could gift shares to your daughter, thereby getting the benefit of two tranches of CGT exempt amounts each year.

Alternatively, don't give it to her at all, just let her live in it rent-free. There will still be IHT due, of course, since the house will still be part of your estate when you die.

Only if you die within 7 years of making the gift. More to the point, though, if you do die within 7 years, there will be a double whammy of having to pay both CGT (at the time of making the gift) and IHT later. This is one point in favour of the renting scheme, since at least it definitely avoids CGT at the expense of definitely not avoiding IHT.

That just means she wouldn't have to pay CGT when in due course she sells it again.

Thanks for this.

Yes I am married. So basically if we were to give her a share each year (thereby fitting into the CGT allowance) no-one would pay any tax unless of course we die within 7 years of her being given the property?

That's right. But don't ask me about the legal mechanics of piecemeal conveyancing.

If your income is big enough that you could afford to pay her this much out of income then you might to better to do that and let her buy (aprt of) the house from you at the commercial rate. "Regular Gifts out of income" do not count for your inheritance tax. But you need to keep records so that your executors and show the gifts came from income not by selling capital.

Robert

That's okay. ;) Thanks.