First time buyer Stamp Duty

pjszms

I am looking at buying a house for £170000 in York to rent out to my son and his 4 friends who are students. If I buy the property in my sons name I understand that as he is a first time buyer No stamp duty is payable. Once the house is in his name can he gift the property back to myself without there being any stamp duty to pay . Or would there be any tax to pay,

G_M

can he gift the property back to myself without there being any stamp duty to pay

:rotfl: :rotfl: :rotfl: :rotfl:
Err... no!

mrstinchcombe

April 1st is tomorrow...

Fire_Fox

If you are buying a property in your son's name to take advantage of the stamp duty embargo then you are bordering on committing tax evasion and/ or mortgage fraud as you will have to declare that the deposit you give your son is a gift. Basically any way to cheat the system is not going to be a novel idea and ALWAYS brings complications.

Even if you can avoid stamp duty, you will need to consider income tax and also capital gains tax if the house is not always the registered owner's main residence. Your son can let a room in his own home for as tax free income of around £4K (must register for the rent-a-room scheme). Anything over that and he will need to complete tax returns and pay income tax. He will also need to declare the income to the student loans company and it may affect his entitlement to student finance. If your son gifts the property back to you following completion of his course but needs to claim means-tested benefits soon afterwards, the gift may be deemed 'deprivation of capital'. If he gifts the house to you during his studies that may also be deemed as deprivation of assets by the student loans company.

James_N

pjszms wrote: »

I am looking at buying a house for £170000 in York to rent out to my son and his 4 friends who are students. If I buy the property in my sons name I understand that as he is a first time buyer No stamp duty is payable. Once the house is in his name can he gift the property back to myself without there being any stamp duty to pay . Or would there be any tax to pay,

One of the stipulations is that you have to have it as your main residence - even if you could just "gift" a property (I think that that proposition is very problematic) - it would mean that this prime stipulation would be broken immediately.

This is a very deceptive tax-break. Very few people wil be in a position to take advantage of no stamp-duty-free up-to £250,000. Essentially a headline grabber that I hope will backfire on the chancellor.

silvercar

YOu probably can do it, particularly as you are keeping within the letter of the law. Once your son has become an owner he will not be able to claim FTB status in the future - so may not thank you for it.

Once you do transfer it to your name, you become a landlord and have to follow all landlord legislation like protecting deposits etc. If the property was in your son's name, the other occupiers would be lodgers with less legal rights and less legislation to bother about. Also, your son as living in his own home will be able to sell free of CGT liability.

Consider also the costs of transferring ownership, that will eat into your stamp duty saving.

I presume you are a cash buyer; if you are getting a mortgage the owners names will have to match that of the mortgage holder(s).