UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Thank you for your quick reply.
In short, he has no tax to pay on the gift, unless the parents die within 7 years and it is then include in the inheritance tax calculations
Can I just ask that if the house is now sold on again, because this house is not his main residence, would he be liable to pay capital gains tax from the profits made from the 'favourable purchase price' to the new sale purchase price.
The son wont have any IHT to pay as that is a liability of the deceased estate. However, take a look here to see who pays IHT in different circumstances.The son's cost for CGT will be the open market value when he bought it at a discount, not the price he paid for the property. So. it the property is sold for more than the open market value at the time it was sold to him plus £10,900 (the annual CGT exemption) then there will be a taxable gain.