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Do I need to pay Capital Gains Tax if I gift property?

  • 2 min read
  • Last updated 20 Sep 2022

If you gift someone a property, you will usually have to pay Capital Gains Tax (CGT) if it increased in value since you bought it.

It’s as if you sold the property for a profit, then took that money and gave it to them as a gift instead.

You don’t need to pay CGT if:

  • You’ve lived there the entire time (it was your home)
  • Or you give it to your spouse
  • Or you put it into a trust for the benefit of your child. In this situation, it will be deferred until your child sells the property

How much CGT will I have to pay?

For the 2021/2022 tax year the Capital Gains Tax rates for property are:

  • 18% for your entire Capital Gains profit from property if your overall annual income is below £50,000
  • 28% for your entire Capital Gains profit from property if your overall annual income is above the £50,000 threshold

You also have a £12,300 Capital Gains tax allowance. This means that:

  • Your Capital Gains up to £12,300 are tax free
  • If you made less than £12,300 in profit you don’t need to pay any tax.

Check our our Capital Gains Tax calculator to work out how much you need to pay.

Can I sell my property “at a friendly low price” so I don’t pay CGT?

Don’t.

If you’re giving it to a “connected person” (children, parents, siblings, etc.), HMRC will still ask you for CGT as if the property was being paid for at market value.

Oh, and you might also get a fine.

Are there any other taxes?

Yes: stamp duty, inheritance tax, and sometimes rental income tax.

Read more in our guide to gifting property.

How do I pay CGT for gifted property?

Until April 2020 you could either:

However, starting from April 2020, all UK tax residents who gifted property and were liable for CGT had to use only the Real Time Capital Gains Tax Service.

What this means:

  • You get a payment reference number instead of a UTR
  • You won’t have to file a Self Assessment every year
  • You’ll need to declare and pay your CGT bill within 30 days

Still not sure if you owe CGT?

We can help. We offer one-off, personal tax advice from an accredited accountant. Speak to  CGT accounting expert and clear up any confusion. Just £119 per consultation with no strings attached. Learn more.

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