Gift Of House To Young Child - Best Way

GGG7

Apologies if I have missed a thread on a similar subject but could not see anything that related enough!

I own 2 properties; one in England which was my primary residence until I moved to Scotland in 2000, when I bought another property with my partner (we have since then split and I have bought a property on my own.) I have lived in Scotland since 2000.

My father lives in my former property and pays me rent (equal to the outstanding mortgage.) My mortgage on this property is due to be paid up in the next few months. I intend to give this property to my son (who is only 3 now) but let my dad remain there as long as he wants (he is 74 now.)

My question is what is the best way to do this?
Sign the deeds over? What would our CGT liabilities be if I do this? Cost of transfer? Do I need to have these drawn up in England or can a Scottish solicitor do this?

Set up a trust fund to slowly transfer ownership?

Do nothing and let him have the house when he is 21 and deal with the capital gains then if he chooses to sell it (that is the age I intend he benefit from the gift.)

I have no other dependents and intend to leave both houses to my son when i die and this should not take him over the Inheritance tax threshold (at it's current level.)

Sorry for the long ramble but I really am in a quandry. I am inclinded to do nothing but don't want to fall into the trap of 'if only I'd done that' to minimise tax.
Many thanks
GGG7

00ec25

you will incur an immediate CGT liability based on the full market value of the property at the time you do the transfer,

however,

not sure that a 3 year can legally own assets, you may be forced to do this in trust (for a minor) anyway. Don't know how this impacts on CGT

GGG7

Thanks for your reply. I did wonder if my son could own the house at his age?
Guessing my best bet would be to go see a solicitor when i next visit my dad in England.
GGG7

CLAPTON

you need to see a solicitor

but
why do you want to do this at this time?

you have to pay cgt immediately
you have to pay stamp duty (if applicable)
when he's 18 he may sell it and waste the money

you will probably need to hold the property in trust until he is 18... you have a legal duty to act in his best interest... letting your father stay there may legally speaking not be in your son's best interest

if you're charging your father rent are you declaring it as income?

when he sells it there will be CGT to pay : if however you drop dead and are under the IHT limit then there is no tax

Torby

solicitor.....