My father is 82 and has two rental properties, which he would like to gift to me, as I have been managing them for the last five years. The properties are currently not rented and need some work doing to them before they are rented out again. The current valuation per property is £120,000 and he purchased them for £100,000 each. My father won't be in the inheritance tax bracket as he doesn't have much but wants to pass the properties to me while he's still alive and see me do them up. Can he gift them to me without either of us having to pay tax? 

Arthur Weller replies:  

If your father gifts the properties to you now while he is still alive, he will have to pay capital gains tax on £40,000. He is better off waiting until he dies and leaving them to you in his will. Maybe you could lend him the money now to do up the properties. But be aware of HMRC's attitude to loans from family (see HMRC’s Inheritance Tax Manual at IHTM28321 and subsequent pages).