Unusual Situation - Mortgage advice required

themull1

:rotfl::rotfl:I like fat middle aged men, do you look a bit like Brian Blessed? :rotfl::rotfl:

Wh05apk

TrickyDicky101 wrote: »

Sorry this is dragging the post somewhat off-topic, but if a lender accepts the £375k as a gifted deposit (and thus they are in effect agreeing to the £675k total valuation) on what value and at what rate is Stamp Duty liable? £300k or £675k?

What do you think HMRC would let you get away with?
























yep, that's right, nothing, you would pay stamp duty on £675k, also don't think about selling "undervalue" at say £350k to reduce tax, as this will get picked up, and potentially could result in more serious implications.

Brock_and_Roll

Also need to bear that this deal could get caught under "deprivation of assets" legistration if you gf's father were to require nursing home care in the next 6 years.

However, if your gf's father is reltively young & healthy this sounds like perfectly reasonable and legal tax planning. After all it seems that no one actually pays IHT these days as there are so many ways with a bit of palnning that you can legally avoid it.

TrickyDicky101

Wh05apk wrote: »

What do you think HMRC would let you get away with?


yep, that's right, nothing, you would pay stamp duty on £675k, also don't think about selling "undervalue" at say £350k to reduce tax, as this will get picked up, and potentially could result in more serious implications.

It seems this isn't the case - since the £375k is a gift it does not count towards the chargeable consideration for SDLT calculation purposes:

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm#4

Thrugelmir

gatkin wrote: »

Great news, thanks for the reply.
To answer your other question, her sister is getting the 800K house

Is this part of a scheme to avoid tax. By selling assets at under market value ?

Wh05apk

TrickyDicky101 wrote: »

It seems this isn't the case - since the £375k is a gift it does not count towards the chargeable consideration for SDLT calculation purposes:

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm#4

"
Property given as a gift

If the property is received as a gift there's no SDLT to pay, so long as there's no outstanding mortgage on it. But if the person who receives the gift takes over some or all of an existing mortgage, then SDLT may be payable if the value of the mortgage is over the SDLT threshold."

I think if the property in its entirety is gifted, it would be free, this would be treated as a purchase therefore liable to SDLT?

Not sure if the property could be gifted in its entirelty, and then later remortgaged for the £300k required? I suspect that would be classed as tax-avoidance, and so illegal?