beneficial to have a joint ownership?

grumpy-old-woman_2

I am about to buy a small house mainly as a long term investment. There will not be any mortgage on the property but someone has suggested that I put the deeds in the name of myself and my son (I think as tennants in common) as this would be better in case I died for iht purposes. Have looked at vatrious websites but have confused myself and dont see if this is correct or not. if anyobe can shed any light i would be grateful

CLAPTON

whether or not to put the property in joint ownership depends on a lot of things

some are
-tax treatment of the rental income
-CGT when you sell
-IHT.. will your estate be above the IHT limit? currently 312,000 for a single person but up to 624,000 if married
-impact on benefits
-it will be part owned by your son and would form part of his estate if he predeceased you:
-also if he married then potentially it could be part owned by daughter in law
-if he became bankrupt or got into debt then it would form part of his assets

grumpy-old-woman_2

depending on current house prices when i die-hopefully not for a few years- my current house may well be the total of the present IHT limit.

obviously cant predict the future and son may go bankrupt but thats true of a lot of people I guess but unless something really catastophic happens its not likely is all I can say.

if it was in both names and i sold it and made a profit how would this effect the CGT for each of us. Any ideas please?

CLAPTON

You need to stop using the word 'I' and use 'we' instead as it won't be yours to sell but a jointly owned property.
Other things being equal, being jointly owned will reduce CGT as you will both have a CGT allowance that can be offset against the tax.

p00hsticks

grumpy-old-woman wrote: »

depending on current house prices if it was in both names and i sold it and made a profit how would this effect the CGT for each of us. Any ideas please?

CGT isn;'t payable if it's your PPR (principal private residence). So if both you and your sone have lived in it for the whole time then there wouldn;t be any CGT to pay. If your son moved out into his own place (owned or rented) and you later sold the property, then your son could potentially have to pay some CTG on his share of the profit, although it may not amount to much.

I assume that your son is an adult ? (I don't believe it's possible for minors to own property, so the whol discussion is moot if he's under 18)