We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Transfer of 2nd home to family member?
futurecut
Posts: 23 Forumite
in Cutting tax
Hi,
sorry if this isn't the right board, there's so many! It's a bit complicated as always.
The mother rents a property which became hers in the estate of my father 10 years ago. It was the grannies but was put in dads name a long time ago. She wants me to move in so she can free herself from the ongoing repairs and refurb costs, either as a tenant or by transferring ownership. The rental income £350pcm - declared tax) pays for her living at present and is a nice 'topup'.
Mum has lots of other income from state pensions, private pensions, life insurance policies and nowadays much less from shares portfolio - she is not in poverty. She has been told she needs to reduce her tax liabilities by getting rid of some cash. She also outright owns her own house which is worth about £250k. She def won't have any of her allowance left.
She wants me to pay rent while investing to refurb as it 'will be mine in the end' but my view was that you either charge rent and act as a landlord and pay those costs or transfer ownership and then i'll do what needs done. I'm certainly not investing lots of money and paying rent at the same time.
The house became hers due to my dads death, not as planned investment so i'd like us both to be able to benefit or at least me benefit while not costing my mum lots in tax.
So i suppose the real question is how can my rich mum give me a second home she presently rents out and declares in a tax efficient manner that preferably means i pay reduced or no rent to both our benefits?
It would be too good to be possible i expect! many thanks.
sorry if this isn't the right board, there's so many! It's a bit complicated as always.
The mother rents a property which became hers in the estate of my father 10 years ago. It was the grannies but was put in dads name a long time ago. She wants me to move in so she can free herself from the ongoing repairs and refurb costs, either as a tenant or by transferring ownership. The rental income £350pcm - declared tax) pays for her living at present and is a nice 'topup'.
Mum has lots of other income from state pensions, private pensions, life insurance policies and nowadays much less from shares portfolio - she is not in poverty. She has been told she needs to reduce her tax liabilities by getting rid of some cash. She also outright owns her own house which is worth about £250k. She def won't have any of her allowance left.
She wants me to pay rent while investing to refurb as it 'will be mine in the end' but my view was that you either charge rent and act as a landlord and pay those costs or transfer ownership and then i'll do what needs done. I'm certainly not investing lots of money and paying rent at the same time.
The house became hers due to my dads death, not as planned investment so i'd like us both to be able to benefit or at least me benefit while not costing my mum lots in tax.
So i suppose the real question is how can my rich mum give me a second home she presently rents out and declares in a tax efficient manner that preferably means i pay reduced or no rent to both our benefits?
It would be too good to be possible i expect! many thanks.
0
Comments
-
If transferred to you, your Mother will be liable to Capital gains tax at the Market Value of the house at the time of the transfer, less any capital losses your Mother may have already and her annual exemption amount. This will be the same if She sells the house to you at any value other than a reasonable Market value. i.e. if the House is worth £150,000 and you pay £100,000 the value will be deemed to be £150,000 and CG paid on that, despite only £100,000 changing hands. Your acquisition cost would be deemed to be MV as well.
As you are related everything for tax purposes will be deemed to be done at market value in order to counter any avoidance that could happen.
IHT will also be an issue I guess as well...0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.5K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.5K Spending & Discounts
- 247.4K Work, Benefits & Business
- 604.3K Mortgages, Homes & Bills
- 178.5K Life & Family
- 261.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards