Gifting a home

ainsworth
ainsworth Posts: 2 Newbie
in Cutting tax
Advise needed please

Can my son gift me a house he has just purchased into mine and his mothers name?
Would he have to pay capital Gains Tax as he now owns four other properties plus his own residence? If so how do I calculate how much CGT he would have to pay.
I am 86 years old so would appreciate a simple answer. Thanking you all in advance
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Comments

  • Keep_pedalling
    Keep_pedalling Posts: 16,591 Forumite
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    edited 1 October 2017 at 2:41PM
    If he has just purchased it there will be no gain to tax. Presumably this property will be rented out so that will make you a landlord, and that comes with responsabilities. You would also need to declare rental income.

    This might also push your estate into IHT territory, or if it's already there, add to the already existing IHT liability.
  • agrinnall
    agrinnall Posts: 23,344 Forumite
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    Or is the intention for you to live in it? If so then CGT is out of the picture entirely, but it would be regarded as your asset should there be a future need for care assessment (as well as the IHT potential already mentioned). I'd suggest that you and you son take professional advice.
  • ainsworth
    ainsworth Posts: 2 Newbie
    The house was purchased for £72,000 a few weeks ago. My son purchased it for us to live in and now wants us to own it outright as our own in our name. I understand from what you have said that there will be no Capital Gains Tax but now see that this may incur Inheritance tax. How would I work out how much?
  • uknick
    uknick Posts: 1,622 Forumite
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    agrinnall wrote: »
    Or is the intention for you to live in it? If so then CGT is out of the picture entirely, but it would be regarded as your asset should there be a future need for care assessment (as well as the IHT potential already mentioned). I'd suggest that you and you son take professional advice.


    Why would CGT be out of the picture of he gifts a house to his parents if they live in it? Or, are you assuming the son will live in it with his parents?
  • Keep_pedalling
    Keep_pedalling Posts: 16,591 Forumite
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    edited 1 October 2017 at 3:12PM
    uknick wrote: »
    Why would CGT be out of the picture of he gifts a house to his parents if they live in it? Or, are you assuming the son will live in it with his parents?

    What was being talked about here was CGT if the OP later sold the property, but as this will be their primary residency that won't apply.
  • Keep_pedalling
    Keep_pedalling Posts: 16,591 Forumite
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    ainsworth wrote: »
    The house was purchased for £72,000 a few weeks ago. My son purchased it for us to live in and now wants us to own it outright as our own in our name. I understand from what you have said that there will be no Capital Gains Tax but now see that this may incur Inheritance tax. How would I work out how much?

    You currently each have a nil rate band of £320k and a primary residence band of £100k so unless your joint estate is over £850k there will be no IHT to pay (assuming you leave your home to your children or grand children).
  • anselld
    anselld Posts: 8,277 Forumite
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    ainsworth wrote: »
    The house was purchased for £72,000 a few weeks ago. My son purchased it for us to live in and now wants us to own it outright as our own in our name. I understand from what you have said that there will be no Capital Gains Tax but now see that this may incur Inheritance tax. How would I work out how much?

    There is no CGT for him now because he only bought it a few weeks ago, presumably at market value.

    There will be no CGT for you in the future because it will be your main residence.

    There will be no IHT unless you have substantial other assets which sounds unlikely under the circumstances.
  • uknick
    uknick Posts: 1,622 Forumite
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    Keep_pedalling wrote: »
    What was being talked about here was CGT if the OP later sold the property, but as this will be their primary residency that won't apply.

    Fair enough. I was under the impression the original question was only about the son's CGT liability and didn't see one about the parents.
  • Sarastro
    Sarastro Posts: 400 Forumite
    I don't think there is any CGT liability as he's not increased the value of the house at the point it transfers to you, so nothing to pay. Even if the value had gone up, everyone has a £10k Capital gain tax free / year.
    It will count towards your estate but whether there is any IHT to pay will depend on the value of assets you have and how you've structured your will (and your partners if you have one).
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  • xylophone
    xylophone Posts: 44,345 Forumite
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    Why doesn't he just grant you and your spouse a life interest in the property rather than going through the gifting and change of registered proprietors malarkey?
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