CGT site transfer parent to child

J

Jacoma

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Hi there, my parents have an old house which needs extensive renovation. I am a first time buyer. My parents are willing to gift this to me, however I would like to pay them something for it. We have agreed a sum which is less than 50% of the market value. My query is
(A) are my parents liable for CGT for the purchase price or the current market value(which is significantly more) of the property?
(B) if the property was gifted to me would my parents still be liable for CGT?
Thanks for your help!
 
(A) Parents are liable on the "gain" achieved between what they purchased the property for and the current market value of the property (assuming they never lived in the property and can't claim PPR relief)
(B) Yes, parents are still liable to CGT if property gifted - again, current market value is the value used in the calculation.
 
There are exemptions, but it depends on the specific circumstances. Mainly it would have to qualify as a site, rather than a house.
If it's a site, not more than 1 acre, it can be transferred without parents incurring CGT. However, if you sell it in future without having built a house, or not occupied as principal residence for at least 3 years, then you would have to pay CGT.
If it's a house, Pablo's post applies.
 
Thank to you both for replies. It's a cottage on an acre site but it's practically derelict & needs extensive renovation. All that will be left of the original house are 3 of the 4 external walls. Roof will have to be replaced & wiring & insulation etc. The bank are classifying it as a new build but for planning purposes it's a renovation & extension as the site failed perculation.
 
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