My brother and I are joint owners of a rented investment property in Newcastle, in which neither of us has ever lived. I wish to transfer my share to him while I am alive, as I have been diagnosed with cancer. I want to transfer at zero cost (no money changing hands). Will I be liable for capital gains tax (CGT)? The property was bought for £224,000 and is currently worth £450,000-£500,000. The property is unencumbered, with no mortgage or loans. Also, will there be any other taxes or stamp duty land tax (SDLT) due? 

Arthur Weller replies:  

The property is currently worth about £250,000 (say £474,000 - £224,000) more now than when it was originally acquired. So your half is worth £125,000 more. This is the amount on which you will have to pay CGT, even if no money changes hands. Please see HMRC's Capital Gains Manual at CG14530: (tinyurl.com/2e7etcd7). A better alternative would be to leave this property to your brother in your will because there is no CGT for death. There will indeed be inheritance tax (IHT) on this when you die, but even if you gift it to your brother now while you are alive, it will be included in your estate for IHT purposes if you die within seven years (i.e., a ‘failed PET’). There is no SDLT on a gift for no consideration.