Confused!! Help!!!!!!!!!!!!!!

sovereign

Hi,

I am confused. I have a property on my name which I am living in. This is worth about £85,000. I have another property in which my parents live in but is also under my name. This was bought by my parents who took the mortgage under my name. My parents have a property in which my broither now lives.

What I want to know is we need to register the properties under the person who is living there. So I am fine but the house in which my parents are living in needs to go under their name. The house that my brother lives in is registered to my father. How is the best way to change, can we simply change the names as no money will be exchanged or do we have to sell them and thus pay Stamp duty on these properties?

I would have to sell my parents property to them for say £100,000. My parents would have to sell thier own house (where my brother is) roughly £80,000.

Is there way of giving them as gifts so no great money is spent on doing this?

Please please help. It is confusing me and we need to sort this out. The main thing is that all the money will be coming from the same pot.

Thanks

Mortgageman

What I want to know is we need to register the properties under the person who is living there

why?

DiggingOut

Yes, I wondered why, too. (Welcome back, MortgageMan).

I think if you structure the exchanges as sales, you will have stamp duty. If you structure them as gifts, there may be issues of inheritance tax, and also the house your parents "give" may end up being a problem if they have to go into long-term care. I don't know the rules on this, but I think you could have a case where a claim is made against them for the value of their home AND the home that they "gave" could also be reclaimed to recover the cost of long term care. :P This could be a minefield.

I don't really know of any compelling reason to do this, but if there is, I would think you need to pay for some very good advice on it, or you could really create problems for the future.

Mortgageman

I don't really know of any compelling reason to do this, but if there is, I would think you need to pay for some very good advice on it, or you could really create problems for the future.

Agree, and I think it likely that stamp duty be payable whatever option decided upon (depending on securitisations)

(Welcome back, MortgageMan).

ta

sovereign

I would be giving my parents the house as a gift!

I spoke to a conveyancer today and she said that I should simply do a name transfer. That way I would not have any stamp duty to pay.

sovereign

Quote:What I want to know is we need to register the properties under the person who is living there



why?

The reason why I want to do this as it does not cause confusion. My father needs to have his property under his name as he is the 'real' owner of it. My brother is inthe same situation.

Originally my father owned 2 properties but when me and my brother moved out he gave a property to both us for a reasonable amount. We did not change ownership on paper as it was all in the famil. He bought a 3rd property one which he paid for but mortgaged it under my name and registered it under my name also. At that time we were all together ie all the income went into one pot etc. so I ended up having 2 properties in my name and my dad kept the property he had originally bougfht and we all had lived in till this point.

Hope that clarifies the situation. If mortgageman or anyone can give me any helpful advice that would be gratefu.

Thanks

Mortgageman

OK then , to get back to your original question then

Is there way of giving them as gifts so no great money is spent on doing this?

the answer is going to be "not really"

There are, I think, 3 props here

1) You live in, Your name on the deeds, no mortgage
2) Your parents live in, your name on the deeds, mortgage in your name
3) Your brother lives in, your fathers name on the deeds, no mortgage

is this right? (the mortgages are important to calculate stamp duty

There will be charges involved

1) Legal fees for changing of deeds - expect circa £500 per property
2) Stamp duty possibly (depending on mortgages etc)
3) There may be care issues as D/O mentions
4) There will be IHT implications

I spoke to a conveyancer today and she said that I should simply do a name transfer. That way I would not have any stamp duty to pay.

I disagree, you will need to check with a tax specialist but I can't see why this would not be included

In my opinion the costs will far exceed the benifit

dunstonh

Also, if i am reading this right, you own two of the properties. If you dispose of the one you dont live in and assuming the true capital value has to be registered, you could be liable to capital gains tax as well.

Inheritance tax would apply.

sovereign

I agree with the charges you have included. What do you mean by IHT implications?

What you have stated also with the 3 props is also correct

ie
1) You live in, Your name on the deeds, no mortgage
2) Your parents live in, your name on the deeds, mortgage in your name
3) Your brother lives in, your fathers name on the deeds, no mortgage

The benefit of doing all this is that then we have each of our own properties on our own names and saves problems later.

Do you have any suggestions as to what would be the best possible way to deal with this? I don't mind paying the costs of changing the deeds and land registry fees. It is mainly unneccessary tax that I was thinking of avoiding. If there is no avoiding then so be it.


I also think what DD has posted will apply:-

If you dispose of the one you dont live in and assuming the true capital value has to be registered, you could be liable to capital gains tax as well.

Inheritance tax would apply.

Mortgageman

IHT implications

Sorry, IHT is inheritance tax (as you mention this later in your post I assume you understand how what you propose may impact on this).

I really think you need to discuss this with a professional (Lawyer or tax specalist), but I'm not sure there is a "better" way to do it - I think they will all be considered sales, and be liable for tax (and they need to be sales at "true" value or there will be all sorts of issues)

Sorry if this is not what you wanted to hear, and I hope I am wrong......

MM

Mozilla_2

Depending on how long each of you have lived in the properties, couldn't you each put a claim in on the property??

Read this thread:

http://forum.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Mortgages;action=display;num=1092927618

p.s. I'm not a solicitor! I just read the above thred before reading this one and put two and two together!