CGT re gift of property including mortgage

[paulpd]

If a parent gifts an investment property to a daughter when there is an outstanding mortgage on the property which the parent expects the daughter to take over, how does this work for CGT? Is the consideration (ie market value) reduced by the mortgage amount?)

(Assuming the bank are fine with the daughter taking out a mortgage in her own name to repay the current (mothers) mortgage).

LTV currently approx 35%.

Thanks

 

[Joe_90]

As this is a connected party transaction the market value of the property will be the "Proceeds". The original cost, inhancement cost and indexation will be deducted from this and the gain computed. The fact that the mortgage is being taken over is allowable when computing the gift for CAT.