If you sell or give property to family or friends that is not your main residence, there will be a disposal for Capital Gains Tax purposes. Whether or not there is a profit and tax to pay on the transaction depends upon the market value and the costs of ownership of the property. It is not uncommon for a previously rented property to be given to children in contemplation of marriage or in the event that their family grows and parents want to assist. Unless this transaction occurs at market value, Capital Gains Tax rules will require market value to be substituted for the actual value used for the transaction. If this was a rental property, not only is there no longer any rent on the rental property, but there could be Capital Gains Tax and to pay an no money available. An embarrassing cash shortfall may have occurred because of the best of intentions, but a failure to discuss the matter with your tax adviser.
19th-August-2006 | 
