Query re: house that was signed over to children, being sold to grandchild.

Susan657

Hi,

I wonder if anyone could help on this situation please.

A man 'Fred' signs over his house to his two sons 'Brian and Steve' 10 years ago.

Fred sadly passes away whilst still living in his house (10 years after signing over the house). 'Brian and Steve' want Brian's daughter (Fred's grandaughter) to buy the house. Brian is going to give his part of the house to his daughter, she will have to pay Steve (her uncle) for his share.

What would be the procedure to take in order to accomplish this please?

Many thanks for your time and help,
Kind regards,
Susan

lostinrates

OP, you might want to edit your names....you slipped half way through.

Susan657

Many thanks lostinrates

Robert_Sterling_3

Is the daughter over 18?
Is there any charge against the house?

milkybars

A lawyer will be able to sort this out for you... make it all legal and ensure that nothing nasty will jump up a few years down the line.

Susan657

Hi, thanks for the replies.

The daughter is over 18, and there is no charge against the house (I presume you mean the same thing as debts? There are no debts against the house).

Many thanks for your help,
Kind regards,
Susan

silvercar

milkybars wrote: »

A lawyer will be able to sort this out for you... make it all legal and ensure that nothing nasty will jump up a few years down the line.

:rotfl: Something nasty is going to jump up now, its called capital gains tax.

Brian and Steve have a CGT liability when the property is sold. They have no principal private residence relief (PPR) as they have not lived in the property as their main home since acquiring a financial interest in it.

Their CGT liability will be based on the difference between its market value on sale (market value is used as the transaction is between related parties) and the value on acquisition. Now the initial value is based on its market value reduced to allow for Fred living in the property, effectively a sitting tenant paying no rent.

Brian and Steve would have CGT allowances if not used elsewhere, but the taxman will expect the sale to be declared and the tax paid.

Susan657

Thanks silvercar, some great information there.

I will try to get an understanding of CGT,

Thanks for your help and time ,
Kind regards,
Susan

Thanks everyone else too!!

alm721

Slightly off topic and apologies for asking on this thread but if a parent signs over a house to their child and at a later date the child sells it there is cgt to pay. Obviously there needs to be a valuation for this purpose whe the house is signed over but what is accepted as a valuation? Does it have to be a formal valuation or can proof of what similar houses are selling for be used?
Thanks