Capital Gains Tax on transfer/gift of property

[RastaMouse]

Hi guys,

Just wondering if anyone could help me with a capital gains tax enquiry. I'm fully covered and up to speed with inheritance tax so no need to get into that. Long story short, my mom is going to transfer ownership of her property to me.

Scenario A: My mom does a transfer of ownership of her property to me in 2025. She passes away in 2026. I sell the house in 2028 for a profit.

Scenario B: my mom passes away in 2026 and gifts the property to me in her will. I sell the house in 2028 for a profit.

I want to keep this as straightforward as possible so there's no hidden trusts etc. In these hypotheticals. Am I correct in saying that the capital gains tax are applicable in both scenarios, here? I.E. there's no capital gains tax exemption in scenario B as it was left in a will rather than a transfer of ownership when she was alive? Someone said this is the case but I think they have gotten inheritance tax mixed up with capital gains tax so I just want to be sure. Any help is appreciated. Thanks

[Pezza54]

CGT is not payable if you make the house your main place of residence..
With current interest rates and falling property prices it seems unlikely that there will be any significant increase in prices in the next few years.
If your mum was to gift you the property now and live for another 7 years there wouldn't be any IHT to pay on the gift. If she does not live 7 years then provided the estate is not an excepted estate, the value of gifts is subject to taper relief.
So a lot depends on how long she lives after making the gift, the value of the house (RNRB) and the total value of her estate

[RastaMouse]

Hey, thanks for your time and your reply. The value of the house in question is £180K, which I believe falls under the inheritance tax threshold (£325K if I remember rightly) so I believe we should be fine in regards to IHT. But please, feel free to correct me if I’m wrong as I’m trying to make sure I do this by the book.

Thank you for the heads up regarding making the property my main residence for CGT purposes. I do have a house with my partner but that’s joint tenancy so would probably make sense to make my mom’s property my main residence from a tax perspective.

So, just to confirm, from a capital gains tax perspective, there really is no difference between us doing a transfer of ownership now while she’s alive as opposed to waiting for her to gift it to me in her will? (Again, if I’m wrong regarding IHT, let me know as that may change things).

Thanks