If our son gifts his share of a property to us, what are any tax implications for either of us?

Question:

We currently rent a property. My son has a share in a property in Cheshire which he does not live in. There is no mortgage on the shared property. He would like to ‘gift’ his share on this second property to us as we don’t have a mortgage as he feels this will prevent him getting a capital gains tax (CGT) charge if and when they sell the property. My question is: will this have any tax or other implications for us? We are retired and do not intend buying again. Will we be liable for any tax or stamp duty when they sell or are there any other implications for us? Our names will be added to the deeds.

Arthur Weller replies.
If your son gifts his share in this property to you, and it is worth more today than when he originally acquired it, he will be liable to CGT on the increase, even though he is gifting it to you for no money payment. There will be no stamp duty land tax on this transaction, because it is a gift for no money. When this property is eventually sold to someone else, you will have to pay CGT on the difference between today’s value (when you acquired it), and the amount it is sold for.

If your son gifts his share in this property to you, and it is worth more today than when he originally acquired it, he will be liable to CGT on the increase, even though he is gifting it to you for no money payment. There will be no stamp duty land tax on this transaction, because it is a gift for no money. When this property is eventually sold to someone else, you will have to pay CGT on the difference between today’s value (when you acquired it), and the amount it is sold for.

This question was first printed in Tax Insider in March 2018.