Mortgage/House transfer to family member.

purplemonk3y

Hi all,

10 years ago I used my ability to get a mortgage as my mother was black listed financially due to an unscrupulous husband. She is still in the house and has been paying the mortgage which I’ve classed as rent a room on my tax returns, we are lucky enough to have bought when houses were affordable, and as such the mortgage is only £310 a month, and obviously I’m not hitting her with local rent amounts to make a profit.

Now my mum has saved up enough cash to pay off the mortgage early. This is great news as she retires in a few months, and not having a mortgage will be great.

The problems are,
1)[FONT=&quot] [/FONT]Can she pay off the mortgage without myself incurrent tax liability on the amount which is around 30k.
2)[FONT=&quot] [/FONT]Can I hand over the house with no cash changing hands, and ensuring she doesn’t get stung for tax liability against the asset? The house is worth around £140


If no one out here knows an answer then who would be best to speak to, a solicitor? A tax accountant? Is there any gov department I could speak to?

Thanks in advance.

Thrugelmir

The gift will deem to have taken place at the market value on the date of the transfer.

Therefore you will incur CGT on the gain.

I assume that you have never lived in the property as your main residence? If it was than part of the CGT liability could well be mitigated.

No penalties if your mother pays the mortgage off.

Senior_Paper_Monitor

As I read the OP he is living there with his mum - in which case no CGT (if no other property) - perhaps the Mr Monk3y can clarify ?

purplemonk3y

I do live there as my main residence.

I rent a flat for midweek use in London for work and spend all other times at home.

chances are I will be moving out to get a place with my lady friend in the near future, so want to sign this place over to my mum to ensure she has complete ownership of it.

so to clarify, if my mum pays off the mortgage which is in my name I won't incur any penalties?

Senior_Paper_Monitor

My view ....

No problem (you will probably have to sign a confirmation that you have no debts in excess of assets as a result of the transfer. other than that no issues).

I am of the opinion there is no tax implication to either of you (unless it puts her into the IHT braket when it comes back to you - but that doesn't sound likely).

It would appear every mum should have a son like you !

Thrugelmir

Senior_Paper_Monitor wrote: »

As I read the OP he is living there with his mum - in which case no CGT (if no other property) - perhaps the Mr Monk3y can clarify ?

Thanks I read it differently from the questions that were asked.