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Keep_pedalling wrote: »The extra 3% only applies to buying an additional property, it does not apply to the new joint home as the existing home will be sold at the same time, so no change in the number of homes owned0
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Keep_pedalling wrote: »The extra 3% only applies to buying an additional property, it does not apply to the new joint home as the existing home will be sold at the same time, so no change in the number of homes owned
If home ownership remains 50/50 then yes only her share can be used for care costs..
That's not quite how SDLT works. The new property, if bought in joint names, will be additional to the OP's main residence and therefore the higher rate of SDLT will be due.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf0 -
Keep_pedalling wrote: »The extra 3% only applies to buying an additional property, it does not apply to the new joint home as the existing home will be sold at the same time, so no change in the number of homes owned
OP 's share of mother's new home is therefore OP acquiring an "additional" property which is not replacing his current main home and thereby triggers the higher rate SDLT
the fact it will be mother's new home is irrelevant. The SDLT rule is applied to each owner individually
para 3.42 page 15: Where a transaction is entered into by joint purchasers the higher rates will apply if the transaction would be a higher rates transaction for any of the purchasers considered individually. So if there are two individual purchasers and Conditions A to D are all met for one of them only, the transaction will be charged at the higher rates.0 -
Izzy_Skint wrote: »Sorry, need to get my marriage date right! Blame the heat!
We (me & mum) purchased the property to be sold in Nov 1992 for the sum of £175,000. It was both our main residence and we owned no other property. So on those dates i lived full time in the property for 21 years as i moved out after marriage in October 2013.
let us say you sell mother's current home in July 2017, that means your ownership period would be 297 months. You lived there for 252 months to Oct13. Your PRR is thus 252 + 13 = 265
the gross gain would be 450 - 175 = 275,000 x 50% = 137,500
you would also need to deduct buying and selling costs for which you should have documentary evidence as they will make a difference to your actual outcome - see below!
PRR : 137,500 x (265/297) = £122,685
your net taxable gain is 137,500 - 122,685 - 11,300 = 3,515 taxable at 18% and/or 28%
so as you see, if you include your 50% share of the buying and selling costs you may well get down to zero or near nothing taxableIzzy_Skint wrote: »C)
I fully understand the care home situation so this of course could arise in the future no matter which name it is in. If purchased 50/50 then i can argue only her 50% share would be liable for the care costs surly?
D)
Regarding filling in forms after 80 years old!
Mum is Mum, she worries.
Please let me know if you need more details and again thanks for everyone's input.
Izzy_Skint
would of course mean higher rate SDLT and a possible CGT bill again in the future which as mother is 80 years old would be rather silly as you will soon inherit anyway at which point if you were not an owner to start with there would only be inheritance tax to be concerned over, not CGT + IHT (the "double whammy" of DIY inheritance tax planning).
Talk to your solicitor about the loan/charge option - that should be better.0 -
Surely it is easier all round for you to lend your mother your share of the proceeds and take a first charge on it to protect your interest?
If your mother is concerned about day to day administration (is there actually much to do) you can either assist or ask her to grant POA with immediate effect?
https://www.gov.uk/power-of-attorney/overview
Your mother can leave you the property in her will - the property will be the family home left to a direct descendant.
https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band
The value of your loan will be deducted from any IHT owed.
Have you discussed the issues arising from your mother's proposal with her?0 -
Go back to the original transfer mortgage and check you really have a 50% beneficial interest.
Being a legal owner on the deeds does not establish beneficial ownership.0 -
getmore4less wrote: »Go back to the original transfer mortgage and check you really have a 50% beneficial interest.
Being a legal owner on the deeds does not establish beneficial ownership.
for Op to prove that he waived all beneficial ownership rights at the point in time that the "part mortgage" was taken out and he was added to the deeds there would need to be Declaration/deed of Trust in place formally waiving those rights
retrospectively creating such a document now would be "somewhat" inadvisable if there is years of expenditure "proving" his interest in the property.0 -
Again amazed by the great advice here, thanks for all your time.
I'm happy for the property to go in my mothers name and yes she has already talked about making another will so the property can be left to me in the future.
Just so i have this correct, by Loaning my 50% share to my mother and with her name solely as the purchaser the benefits would be the following :
A) She would pay the standard rate of Stamp Duty which works out at £7,500 instead of the higher £18,000.
CGT & IHT is not applicable.
C) I (myself) giving her my share would incur no charges regarding tax.
Does this seem about right?
Please correct me if there are any fee's.
This just leaves the £100,000 left over from buying a cheaper property. This money would of course become my mothers and would that be subject to any tax for her?
Thanks again
Izzy_Skint0 -
Don't forget that if you loan her 50%, you would need to place a first charge against the property to protect your investment. It is up to you whether or not you include an interest clause in this.Never Knowingly Understood.
Member #1 of £1,000 challenge - £13.74/ £1000 (that's 1.374%)
3-6 month EF £0/£3600 (that's 0 days worth)0 -
Izzy_Skint wrote: »Again amazed by the great advice here, thanks for all your time.
I'm happy for the property to go in my mothers name and yes she has already talked about making another will so the property can be left to me in the future.
Just so i have this correct, by Loaning my 50% share to my mother and with her name solely as the purchaser the benefits would be the following :
A) She would pay the standard rate of Stamp Duty which works out at £7,500 instead of the higher £18,000.
CGT & IHT is not applicable.
C) I (myself) giving her my share would incur no charges regarding tax.
Does this seem about right?
Please correct me if there are any fee's.
This just leaves the £100,000 left over from buying a cheaper property. This money would of course become my mothers and would that be subject to any tax for her?
Thanks again
Izzy_Skint
OK, noted on the First Charge, thanks.
What about the last question regarding the £100,000?
Thanks
Izzy_Skint0
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