a question about paying CGT when making a gift

[odysseus]

I want to gift a house I inherited to my sons. If making a gift is treated, for tax purposes, as if I sold the property for its market value then I am subject to CGT at 20% on the difference between the current value and what I paid for it (after indexation and costs of acquisition/disposal).

In my case, how is a value attached to what I paid for it given that, being freely inherited, I paid nothing for it? I remember the house was valued at the time I applied for waiving inheritance tax (favoured nephew status) and I am wondering if this would be used to assess such a value. Given that the house at its current value is probably less than this, would this mean I might not have to pay any CGT?

 

[Nige]

Firstly, CGT is 25% now.

Your "base cost" is deemed to be the market value of the house at the date the person you inherited it from died.

 

[jpd]

The base cost will be the valuation used when you inherited the property - this would be near the market value of the property at the time and will be in the CGT returns submitted when you inherited the propoerty.

If you inherited the property before 2002, than the cost can indexed up using official indexation factors available on the Reveune website.