My wife and I own a property in the UK but are now tax residents in Spain. Our daughter has lived in the house but is now moving to Spain and we intend to let the property. What would be the tax implications if we gifted the house to our daughter and the rental income was paid to her?

Arthur Weller replies:
Let’s assume you gifted the house to your daughter in March 2019. If you look at Example 1 in HMRC’s Capital Gains manual at CG65070 (www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65070), as a non-UK resident you are liable to pay UK on the increase in value of the property from April 2015 to March 2019. But because this property was once your principal private residence, you have the benefit of the final period exemption, so the period from September 2017 until March 2019 is exempt, so you are only liable for the period April 2015 until September 2017. As for the rental income, your daughter will be liable to UK income tax on it (but most likely she will have the benefit of the UK personal allowance). She should apply to HMRC under the non-resident landlord scheme.