{"id":706,"date":"2022-08-10T11:59:52","date_gmt":"2022-08-10T11:59:52","guid":{"rendered":"https:\/\/springbokproperties.co.uk\/blog\/?p=706"},"modified":"2024-01-10T14:32:24","modified_gmt":"2024-01-10T14:32:24","slug":"sell-house-gifted-to-me-2022","status":"publish","type":"post","link":"https:\/\/www.springbokproperties.co.uk\/blog\/sell-house-gifted-to-me-2022","title":{"rendered":"Can I Sell a House That was Gifted to Me? UK Guide 2024"},"content":{"rendered":"

If you have received property as a gift, and if the previous owner has followed all of the steps required by law to transfer the title deeds to your name, you will have full control over the home and can use it, or \u201cdispose of it\u201d, in any way you wish.<\/span><\/p>\n

Many homeowners who have received property in this manner find themselves asking the question \u201ccan I sell a property that was gifted to me?\u201d.<\/span><\/p>\n

The answer is simple. After you have received property via Deed of Gift, the previous owner will have no claim over it and it will officially be yours. Any and all decisions associated with the house will be your responsibility. This extends to its lease or sale.<\/span><\/p>\n

In this guide, we’ll explore the process of selling property that you received via Deed of Gift or Transfer by Way of Gift (both of which refer to the same process).\u00a0<\/span><\/p>\n

We will discuss the tax implications of a sale of this kind, as well as looking at the timescales involved and the most practical methods to use in order to achieve a quick and hassle free process.<\/span><\/p>\n

What Happens if I Sell a Gifted Property?<\/span><\/h2>\n

Selling a property that you received as a gift is much the same as selling any other house or asset you happen to own. The only potential difference is that, depending on your specific circumstances, there may be tax implications associated with certain transactions of this kind.<\/span><\/p>\n

The two main taxes associated with inherited or gifted property are Capital Gains Tax and Inheritance Tax – although Stamp Duty Land Tax (often referred to as SDLT or simply Stamp Duty) and Income Tax may also be payable in specific situations.<\/span><\/p>\n

When Do You Pay Capital Gains Tax?<\/span><\/h3>\n

Capital Gains Tax (CGT) is a levy on any profit that is made when selling an asset that has increased in value since it first entered into its owners possession.<\/span><\/p>\n

Capital Gains Tax is most commonly paid by the <\/span>donor <\/span><\/i>of the property when it is passed on via Deed of Gift, rather than by the recipient. This means that if you have received property as a gift, it will usually be the gift giver who pays this tax, not you.<\/span><\/p>\n

What\u2019s more, if the gifted house is to become your primary residence, you will very rarely have to pay any Capital Gains Tax when you come to sell it.<\/span><\/p>\n

However, when selling a gifted or inherited property that is not your main residence, you will probably need to pay Capital Gains Tax worth 18% of the difference between the home’s fair market value when you first received it and the amount for which it sells.<\/span><\/p>\n

This is because the property will be considered an \u201casset\u201d, and, in the eyes of the law and of HMRC, the act of selling it equates to the disposal of an asset for monetary gain.<\/span><\/p>\n

It is worth noting that, at the time of writing, Capital Gains Tax is charged at a higher rate for those who earn above \u00a350,270 per annum. The aforementioned 18% only applies to individuals paying the Basic Rate of tax.<\/span><\/p>\n

You will not usually have to pay Capital Gains Tax if you sell or gift property to your spouse or civil partner. However, CGT may apply when <\/span>they <\/span><\/i>come to sell it.<\/span><\/p>\n

Capital Gains Tax Allowance<\/strong><\/h4>\n

When it comes to CGT, each individual currently has an annual tax-free allowance of \u00a312,300 on all profits gained from the disposal of assets, though the precise threshold is subject to change year-on-year.<\/span><\/p>\n

Simply put, Capital Gains Tax is not payable on the first \u00a312,300 that you earn from disposing of an asset – which, in this case, means selling a gifted property that is not your main residence.<\/span><\/p>\n

If you share the property in question with another individual, i.e. if the title was transferred by Deed of Gift into your name <\/span>and<\/span><\/i> someone else’s – your partner\u2019s, for example – you may be able to combine your individual allowances.<\/span><\/p>\n

This means that the tax free CGT threshold will be pushed up to \u00a324,600 for your combined taxable profits.<\/span><\/p>\n

It is not possible to carry your CGT allowance over to the next tax year if it has not been used.<\/span><\/p>\n

You can find up to date information on Capital Gains Tax allowances and bands by visiting <\/span>gov.uk<\/span><\/a>.<\/span><\/p>\n

When Do You Pay Inheritance Tax?<\/span><\/h3>\n

Inheritance Tax is payable on any gifted amount or asset when the gift giver’s estate is worth over \u00a3325,000. If this is the case, the estate will usually cover any amount of IHT payable upon their death.<\/span><\/p>\n

However, if the total value of the gifts they have given within the seven years <\/span>preceding<\/span><\/i> their death has reached or exceeded \u00a3325,000, any additional gifts beyond this value will be subject to taxation payable by the recipients.<\/span><\/p>\n

The amount of tax due depends on the time that has elapsed between the date of the gift being given and the date of the donor\u2019s passing. To this end, IHT will be payable at:<\/span><\/p>\n