My mum owns a house in Manchester worth £360,000. No mortgage is attached. My mum and I own another house in Leeds worth £285,000. She owns 17.5% of this house and I own 82.5%. Again, there is no mortgage attached. I want to 'gift' her £125,000 of the house which I (mostly) own, and she wants to 'gift' me £125,000 of the house she owns.

Arthur Weller replies:
You are gifting to her almost 44% of your house, and she is gifting to you almost 35% of her house. If you look at www.gov.uk/hmrc-internal-manuals/capital-gainsmanual/cg13090 you can see that this transaction is subject to capital gains tax (CGT), based on the current market value of the properties. However (depending on the facts), most likely principal private residence relief should reduce the CGT. There will also be stamp duty land tax on this transaction, see www.gov.uk/hmrc-internalmanuals/stamp-duty-land-tax-manual/sdltm04020 and 04020a, based on the figure of £125,000.