Transferring Property to Child - UK

Rae77_2

When I moved to take up my current job I was not in a position to get a mortgage so my father kindly bought a house for me and my partner to live in. I made regular payment to my father and the property is now mortgage free. I now have to move due to work circumstances and ideally my father wants transfer the property to my name to make it easier for us to purchase a new property. Can anyone advise the cheapest way to do this and what taxes etc we or him will be liable for? BTW We all live in England.

Many Thanks
R

mynameisdave

Well if you take ownership of the property before you buy your new property then you will not be eligible for stamp duty exemption on the new purchase (although if this is over 250K it wont matter anyway).

I'm sure there are Capital Gains Tax and possible inheritance tax issues as well

clutton_2

Contact the Land registry they are very helpful and will send you the correct form.. you dont need a solicitor to do this...

TrickyDicky101

There are tax implications in doing this - specifically a potentially large CGT liability for your father depending on what the property originally cost and what it is now worth (note: this is not the same as what he will 'sell' it to your for which is £nil). You need professional advice to understand the consequences.

sunshinetours

TrickyDicky101 wrote: »

There are tax implications in doing this - specifically a potentially large CGT liability for your father depending on what the property originally cost and what it is now worth (note: this is not the same as what he will 'sell' it to your for which is £nil). You need professional advice to understand the consequences.

You're saying there are CGT implication if the father gifts his property to his son?

There might be IHT issues but not CGT on gifts

TrickyDicky101

sunshinetours wrote: »

You're saying there are CGT implication if the father gifts his property to his son?

There might be IHT issues but not CGT on gifts

Check HMRC's guidance:

http://www.hmrc.gov.uk/cgt/intro/basics.htm

A gift counts as a disposal for CGT purposes.

sunshinetours

TrickyDicky101 wrote: »

Check HMRC's guidance:

http://www.hmrc.gov.uk/cgt/intro/basics.htm



A gift counts as a disposal for CGT purposes.

My apologies I read the OP post too quick and thought it was the fathers main home not a second home. As you say the gain is important here then, not any money exchanging hands

Whether OP can argue any of the money he has paid for the mortgage over the years was an effective purchase of the property via an informal mortgage is arguable but may be worthy of review

Also really depends on what sort of gain we are talking here based on original purchase price and market value at deemed date of transfer

nollag2006

sunshinetours wrote: »

Whether OP can argue any of the money he has paid for the mortgage over the years was an effective purchase of the property via an informal mortgage is arguable but may be worthy of review

The OP needs to get professional advice on this, as in addition to GCT payable, there is also the possibility of income tax payable (plus fines and penalties) for the rent you have been paying to him over the years.

Suggest you try posting over on Landlordzone as they have a lot of well informed tax experts there. Ultimately, it is worth paying for a decent tax lawyer to handle this for you