Tax Implications of Transferring House between Siblings

[Jazz1966]

Hi,

Is there anyone who can advise my friends?
They have tried Google and the HMRC website, but have found conflicting advice.

My friend owns a house, but it is not her primary residence.
Her brother has lived in this house for the last 10 years.
There is a mortgage on the house (taken out by her), and her brother has been paying the mortgage.
He has now paid the mortgage off, and my friend wants to 'gift' the property to her brother.

What are the tax scenarios for my friend?

Some sites suggest that she can gift the property and IHT would only be payable if my friend were to die within 7 years of making the gift. Under this scenario, no CGT would be payable on the making of the gift..

Other sites suggest that the 'gift' would be seen as a sale and CGT would have to be paid now.

Please could someone advise?

[Pezza54]

Please read the article "Gifting property and capital gains tax explained" at lawhive.co.uk

If the property has increased in value since your friend bought it and she gifts it to her brother, she will most likely have to pay CGT

She may want to receive a tax accountant's advice after providing them with financial details as there may be ways of reducing CGT such as:

Any money spent on the property making improvements should be taken into account

Transferring (gifting) ownership of the property gradually and making use of the annual CGT allowance