Keep it, sell it, move it into a company or give it away?

Weighing up the four options

Selling triggers Capital Gains Tax now but frees the cash. Holding defers the tax and keeps the rent, so the question is whether the property earns more on the money left in it than you could earn elsewhere. Moving it into a company or giving it away are both treated as sales at market value for CGT, without any sale proceeds to pay the tax from.

Gifts to children

A gift to a relative is a disposal at market value, so CGT is due as if you had sold.¹ For inheritance tax it is a potentially exempt transfer: no tax if you survive seven years, with taper relief on the tax after three.² If the child takes over the mortgage, the debt they assume counts as the price for stamp duty.³ If you keep using the property or keep any of the rent, it is normally still taxed as part of your estate when you die (a gift with reservation of benefit).⁴ For a child under 18, rent over £100 a year from a parent's gift is taxed on the parent.⁵

Moving into a company

The company pays stamp duty on the market value and you pay CGT unless incorporation relief applies, which is unlikely for a single let property. See the full incorporation calculator.

Gifts between spouses

Transfers between spouses and civil partners living together are on a no gain, no loss basis, so moving a share before a sale can use both owners' exempt amounts and basic rate bands. The gift must be outright, with the sale proceeds for that share belonging to the spouse.⁶