Would it be categorised as a ‘gift’ and would tax be charged accordingly?
Is it better for my tax bill if my parents transfer their house to me now rather than in their will?This needs to be looked at from a capital gains tax , capital acquisitions tax and stamp duty perspective. Photograph: iStockI am single and live with my parents.
A gift is treated as a disposal of the house at its market value, and CGT may arise for the person gifting the house if the house has increased in value from the time it was purchased. However, Principal Private Residence relief can relieve the CGT where the house has been used as your parents’ principle residence throughout their ownership period. Stamp duty arises when property is transferred by way of a gift, and this is payable by the person receiving the property.
The CAT charges may be lessened by your parents transferring the house to your name during their lifetime if it is likely to further increase in value. It is also advisable to provide for a “nonexclusive right of residence” in the house for your parents, in which case a slice of the property is effectively not treated as passing to you until after their death.
Inheritance Inheritance-Tax Capital-Gains-Tax-Cgt Tax
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