Thirty years ago I bought a house and my sister came to live with me. But for the past 18 years I have been living with a friend, leaving my sister to live in the house rent free. Now I want to give it to her. Will I have to pay capital gains tax?
Almost certainly. A private home is normally exempt from capital gains tax – but only where it is your main place of residence. Since you have been away for 18 years you would qualify for only minimal relief; there was also something called “dependant relative relief” if you moved out prior to 6th April 1988. If you want to proceed you should ask the tax office to work out your liability. But you might be better off just leaving the house to your sister in your will.