CAT - Free use of Property and Gift Splitting

Question 1

Define Free Use of Property

Answer 1

A charge to tax arises where a person has the use and enjoyment of property either for no consideration or less than full consideration.

If, the free use is on-going, the benefit is deemed to be taken on the 31st of December each year.

Question 2

Define Gift Splitting

Answer 2

If a gift is passed on to someone in a different group within three years of when it was received it is called gift splitting. Gift splitting affects the threshold used.

To stop taxpayers from doing this we have an anti-avoidance measure that states that if A gives a gift to B and within three years before or three years after B gives a gift to C, C is treated as receiving the gift from A rather than from B.