Capital Gains Tax

Ellabobbin

Hello,

A friend of mine has asked me a capital gains tax question and I'd appreciate some help!! 12 months after sitting my personal tax exam and it's hazy already, best get the text books out again, spend lots of time on the HMRC website and be proactive about enrolling for ATT me thinks...

Anyway, his parents have gifted their Principle Primary Residence to him. although this is a transfer to a connected person, would I be correct in thinking that they have no CGT liability since it is their PPR which is exempt? Also, for the purposes of CGT if/when he sells the property is it the value of the property when it was transferred to him that is his 'cost'?

Thanking you in advance :-)

JodieR

I'm rusty on this too so I'll not say too much. Is your friend going to be living in the house or renting it out? If they're going to be living there I can't see that there's any CGT implications at all.
As well as the potential CGT situation, you should look into whether there would be any inheritance tax implications if the parents were to pass away in the next 7 years.
Jodie