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    • ainsworth
    • By ainsworth 1st Oct 17, 1:53 PM
    • 2Posts
    • 0Thanks
    ainsworth
    Gifting a home
    • #1
    • 1st Oct 17, 1:53 PM
    Gifting a home 1st Oct 17 at 1:53 PM
    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
Page 1
    • Keep pedalling
    • By Keep pedalling 1st Oct 17, 2:22 PM
    • 3,752 Posts
    • 4,019 Thanks
    Keep pedalling
    • #2
    • 1st Oct 17, 2:22 PM
    • #2
    • 1st Oct 17, 2:22 PM
    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.
    Last edited by Keep pedalling; 01-10-2017 at 2:41 PM.
    • agrinnall
    • By agrinnall 1st Oct 17, 2:44 PM
    • 18,515 Posts
    • 14,230 Thanks
    agrinnall
    • #3
    • 1st Oct 17, 2:44 PM
    • #3
    • 1st Oct 17, 2:44 PM
    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
    • By ainsworth 1st Oct 17, 2:59 PM
    • 2 Posts
    • 0 Thanks
    ainsworth
    • #4
    • 1st Oct 17, 2:59 PM
    • #4
    • 1st Oct 17, 2:59 PM
    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
    • By uknick 1st Oct 17, 3:00 PM
    • 698 Posts
    • 305 Thanks
    uknick
    • #5
    • 1st Oct 17, 3:00 PM
    • #5
    • 1st Oct 17, 3:00 PM
    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.
    Originally posted by agrinnall

    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
    • By Keep pedalling 1st Oct 17, 3:07 PM
    • 3,752 Posts
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    Keep pedalling
    • #6
    • 1st Oct 17, 3:07 PM
    • #6
    • 1st Oct 17, 3:07 PM
    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?
    Originally posted by uknick
    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.
    Last edited by Keep pedalling; 01-10-2017 at 3:12 PM.
    • Keep pedalling
    • By Keep pedalling 1st Oct 17, 3:11 PM
    • 3,752 Posts
    • 4,019 Thanks
    Keep pedalling
    • #7
    • 1st Oct 17, 3:11 PM
    • #7
    • 1st Oct 17, 3:11 PM
    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?
    Originally posted by ainsworth
    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
    • By anselld 1st Oct 17, 3:14 PM
    • 5,316 Posts
    • 4,849 Thanks
    anselld
    • #8
    • 1st Oct 17, 3:14 PM
    • #8
    • 1st Oct 17, 3:14 PM
    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?
    Originally posted by ainsworth
    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
    • By uknick 1st Oct 17, 5:14 PM
    • 698 Posts
    • 305 Thanks
    uknick
    • #9
    • 1st Oct 17, 5:14 PM
    • #9
    • 1st Oct 17, 5:14 PM
    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.
    Originally posted by Keep pedalling
    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
    • By Sarastro 1st Oct 17, 5:49 PM
    • 109 Posts
    • 61 Thanks
    Sarastro
    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).
    • xylophone
    • By xylophone 1st Oct 17, 11:58 PM
    • 23,124 Posts
    • 13,401 Thanks
    xylophone
    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?
    • getmore4less
    • By getmore4less 2nd Oct 17, 7:03 AM
    • 30,000 Posts
    • 17,929 Thanks
    getmore4less
    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?
    Originally posted by xylophone
    If the parent are going to live there and have plenty of nil rate band it potentially saves any future CGT liability with no extra IHT liability

    A life interest trust would not have the same benefit(since 2006).

    parents may need to be careful who inherits the house from them as this would be a gift so does not drop out of the sons estate for 7 years and if he re inherits it that could result in double the value in his estate if there was an unfortunate sequence of deaths in the 7 years(unless there is some IHT relief for this scenario).
    • xylophone
    • By xylophone 2nd Oct 17, 10:16 AM
    • 23,124 Posts
    • 13,401 Thanks
    xylophone
    But if he gifts the property and the parents will it to him, unless he sells the property immediately he inherits, he is likely to incur a CGT liability anyway?
    • getmore4less
    • By getmore4less 2nd Oct 17, 2:35 PM
    • 30,000 Posts
    • 17,929 Thanks
    getmore4less
    But if he gifts the property and the parents will it to him, unless he sells the property immediately he inherits, he is likely to incur a CGT liability anyway?
    Originally posted by xylophone
    in a few years it could have a higher base price than the current base price.

    With tax it not about if there will be any but how much will it be.
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