I own a flat which I rent out to a tenant. I'd like to give
the flat to my son so he can manage the property and benefit from
the profits of the tenancy. If I do that, will he end up with a
large tax bill?
There are often several tax complications incurred with the
transferring of property, and all too often they are not fully
explored prior to embarking on a scheme.
Firstly, the gift itself may trigger both capital gains tax
(CGT) for you and also inheritance tax (IHT) for your
beneficiaries. In giving the gift to your son, because you will be
liable for CGT payment, and you should discuss with your accountant
or tax advisor as to what the amount of CGT is, when it should be
paid and in which financial year. With regard to IHT, should you
die within 7 years of making the gift there is potentially an IHT
liability. Proper and thorough estate planning should be sought in
this area, to avoid liability for this tax.
