Buyout

johntudor7

My three brothers and I purchased my Mothers council house 20 years ago. So that we could benefit from her discount, the house was purchased in my Mothers name. I am in a position to buy my Brothers out ( they all agree) however, I want to transfer the deeds into my name; what do I have to do? Will I have to pay anything to the revenue if I do this?

silvercar

Do you have a mortgage on the property? If so you will need the lenders agreement. Otherwise it is just a transfer of equity that you could complete land registry forms to do. Phone up the land Reg, they are quite helpful. If you want to do it through solicitors or need to get mortgage names changed, expect to pay £2-400.

As for tax, your brothers could be liable to capital gains tax. If they have not lived in the property as their main residence since they acquired a financial interest in the property, there could be a CGT calculation required, it depends how long they lived there since ownership.

Where is your mother in all this? Will she be living in what will become your home, rent free? [Asking because it effects the CGT liability.]

johntudor7

Mother will live in the property rent free, she has done for the last 20 years. There is no mortgage on the property.

silvercar

If the property is in her name, it will look like a sale from her to you. As it is her home there will be no CGT liability at the time of sale. You could have a big liability when you sell it, depending on any gain.

If the revenue are aware that (or you all declare that) the brothers are the benficial owners of the property and are selling to you then they have a CGT liability on sale based on the difference in price of their share when they bought and when they sell.

Assuming they have not lived in the property as their principle private residence at any time since owning, the CGT calculation is based on the difference between the selling price and the purchase price, less costs. The slight twist would be that both prices would be the open market value discounted by the fact that there is effectively a sitting tenant paying no rent. If not used elsewhere, each individual has a CGT allowance, currently worth £9,600.

poppysarah

Take advice on whether she may be seen as depriving herself of assets too.