Does gifting a property – either a transfer or at a reduced price – attract tax?

Q My sister, who lives abroad, bought a UK property in 2004 which has since been let out, and I have been the letting agent. The average annual rent she has been getting is about £6,000-£7,000. This is her only UK property and she paid £47,000 for it – it is now valued at about £85,000. She is now thinking about giving it to me as a gift. I already own one house with no mortgage. What are the tax positions if she transfers it to me, or if she sells it to me at a reduced price (eg £20,000)? If she were to sell the house and give me all the money, how much capital gains tax must she pay, and how much tax must I pay on this lump sum gift? PB A To answer your last question first, there is no tax for you to pay as the recipient of a gift, whether it is in the form of cash or an asset such as property. Your sister, however, will face a capital gains tax bill, and the tax position will be the same whether she sells the property on the open market, gives it to you, or sells it to you at a reduced price. In these cases, the gain will be the sale price (if sold on the open market) or the market value (if given away or sold to you for a reduced price) less the cost at acquisition and the expenses of buying and selling, which includes things like estate agent and legal fees and stamp duty land tax.