Any IHT or CGT implications?
Any IHT or CGT implications?
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Original Poster:

49,519 posts

226 months

Friday 2nd November 2012
quotequote all
Hypothetical question -

Parent (who is not UK resident) transfers assets to children (as he's getting on a bit and would rather have everything sorted out whilst he's fully compos mentis)

One asset is a property which will be transferred into the name of the eldest brother. He in turn will buy out the shares of his 4 siblings. So the property is worth £200k - he will pay £160k to his 4 siblings (£40k each)

As far as I can see there should not be any IHT charge as the Parent is not UK-resident or domiciled here.

Are the children who are being "bought out" of their share of the property liable to CGT?

Newc

2,195 posts

212 months

Friday 2nd November 2012
quotequote all
Countdown said:
One asset is a property which will be transferred into the name of the eldest brother. He in turn will buy out the shares of his 4 siblings.

Are the children who are being "bought out" of their share of the property liable to CGT?
If the siblings never appear on the house deeds, this is simply a gift from the eldest brother of 40k to each sibling. No CGT, but potential IHT if the eldest dies in the next seven years.

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Original Poster:

49,519 posts

226 months

Friday 2nd November 2012
quotequote all
Thanks Newc - that makes sense thumbup

ellroy

7,846 posts

255 months

Saturday 3rd November 2012
quotequote all
Correct as far as the UK goes, but what about IHT implications of the country of residence?

There could well be an issue there on death of the parent.

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Original Poster:

49,519 posts

226 months

Saturday 3rd November 2012
quotequote all
Should be fine. No IHT in the country where the property is located.

Lawrence5

1,254 posts

265 months

Sunday 4th November 2012
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I take it there's other assets then as the amounts won't be subject to iht ?

Where's the property ? Where's the rest of the cash and assets ?

Iht doesn't follow residency rules with strange "deemed domiciled" which can be harder to shake off by living abroad...

If the sums are substantial, proper advice is a must...

Edited by Lawrence5 on Sunday 4th November 10:21

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Original Poster:

49,519 posts

226 months

Sunday 4th November 2012
quotequote all
Property in question is in Dubai. The parent has other assets mainly in Pakistan. He's not a UK passport holder and only comes here every 2/3 years to see his grandchildren. Therefore AFAICS he's not subject to any UK taxes.

His children are UK residents so WOULD be subject to CGT but I think that will only happen if and when they dispose of the property.


Lawrence5

1,254 posts

265 months

Sunday 4th November 2012
quotequote all
Sounds fine then....