Do I have to pay CGT if I gift a property to my child?

Hi Mel,

It's great that you are thinking about this carefully. I often come across cases where Capital Gains Tax (CGT) isn’t considered, although this is normally with stocks & shares, so it is definitely wise to check.

If the flat has been your only or main residence for the entire time you’ve owned it, you will usually qualify for Private Residence Relief (PRR). This means no CGT would be due on the transfer, and in that case, things are fairly straightforward.

However, there are some important exceptions:

• If you have ever rented it out, used it as a second home, or left it empty for long periods, only part of the gain may be exempt.

• If it’s not your main home (e.g. a buy-to-let or holiday property), then CGT is very likely to apply when you gift it to your son, even though no money changes hands.

If the property hasn’t always been your main residence for the entire time you have owned it, I would strongly recommend seeking professional tax advice so you can be clear on your exact liability before making the transfer.

I hope this helps!