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House as a gift.

I am in a position where a friend of mine wants to buy me a house.
She is going to buy the house as a cash purchase and transfer the ownership to me, giving me the deeds.

Is there anything I need to be aware of, would this be in the catagory of IHT?

The house is currently valued at £195,000 but she is going to extend it to make a four bedroom, I expect the building work to cost approx £30,000.
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Comments

  • googler
    googler Posts: 16,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Wow. Christmas come early.

    Can I be her friend too?
  • McKneff
    McKneff Posts: 38,857 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Why doesnt she just give you the money and you buy the house?
    This would save a lot of legal stuff.
    Then the money is just a straight gift from her to you.

    No IHT to think of, no. CGT to think of

    I am confused as to her way of thinking.
    make the most of it, we are only here for the weekend.
    and we will never, ever return.
  • Wish I had friends like yours!
    If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    If she dies within 7 years then there is a potential Inheritance tax liability on her estate


    If she buys the house and gives it to you later then she may be liable to cpaital gains tax if the price of the house has risen significantly.... why doesn't she give you the money and then you buy the house?
  • babyblooz
    babyblooz Posts: 1,122 Forumite
    Part of the Furniture 500 Posts
    Why would someone want to just give someone a house?
    :hello: :wave: please play nicely children !
  • Why would someone want to just give someone a house?

    Because she is a REAL friend!
  • babyblooz
    babyblooz Posts: 1,122 Forumite
    Part of the Furniture 500 Posts
    I've got lots of real friends too, but no one in a position to give me a house ... worse luck:confused:
    :hello: :wave: please play nicely children !
  • Maybe she won the lottery?

    Or maybe she will feel good by doing so if she has enough to dish out - I know I would if I was in the situation.

    Or maybe she is trying to dispose of assets before going bankrupt?! In which case you will be in trouble as the person appointed to deal with her bankruptcy will likely reverse the transaction - so just make sure your friend's finances are totally in order before you accept it.
  • Why doesnt she just give you the money and you buy the house?.

    I think because she sees the house as more of a personal gift than just money, Spoze its like taking the time to buy someone something for their birthday or Christmas rather than just sticking the money in a card.
  • is this true..................
    Inside me lives a skinny woman crying to get out - but I can usually shut her up with cake!
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