transfer of equity 1:2

skyepark

Hi

my father wants to transfer the equity of his property I assume 50% to me as a gift and protect assets. I am in India and he will come over soon, where can we get this done when abroad? Also how will this affect me adn my finances or when I wish to purchase a home in the future?

dunstonh

my father wants to transfer the equity of his property I assume 50% to me as a gift and protect assets.

What does that achieve as it neither protects assets or avoids IHT?

Also how will this affect me adn my finances or when I wish to purchase a home in the future?

It wont unless there is a mortgage on the property.

skyepark

well he wants to add my name on the property for personal reasons. family matters and such. There is no mortgage on the property.

dunstonh

Ok, it doesnt avoid inheritance tax, it doesnt protect assets from local authority care means test (if that is what you meant by protect assets) and it leaves you with a capital gains tax bill to pay when the property is sold.

So, whilst he may have personal reasons, for doing it, there is unlikely to be any financial benefit. Indeed, quite the opposite with the extra tax that will apply.

Senior_Paper_Monitor

..... and in addition to the absolutely valid issues listed by Mr Dunstoh will leave the property vulnerable to any debt claims on yourself (and, if you are married, don't have a will - or have one that doesn't specifically allow for such an arrangement - and die before your parents ownership of the property in full or part, depenmding upon the natire of the deeds structure, could transfer outside your blood family as a result). Frankly the list of potential disasters goes on and on.

Please take advice on this from an IFA, estate planner or solicitor before doing anything - this is not the sort of decision to take based on the local barroom experts advice!

skyepark

i see thank you for your advice. My father isn't the most practical people, basically hes has a 2nd wife who also has her own property and assets which she will leave to her son, i guess my dad wants to show her that she wont be getting his property, I also think he's afraid of being swindled by or something.

I don't have debt nor does my dad, and I think my dad is putting my name on it so that if him and his wife divorce then she won't get half of the property or somethings like that in which case if that doesn't happen and my dad sells he will expect to gain all profits and pay the tax.

I need to weight this up whether its in my best interest to do this.

Senior_Paper_Monitor

That's fine - what all parties need is correct professional advice on the appropriate structures (not well meaning barroom theories).

Incidentally, be aware that if you went ahead with this probably ill-advised structure, you would lose any potential SDLT relief for your own house purchase if you were an otherwise first time buyer.