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Buying property to do up
ceejayblue
Posts: 310 Forumite
My friends are thinking of buying a property to do up and sell on. They are thinking of putting the mortgage in the name of their 24 year old daughter and once the property is finished they would sell it on. They have a deposit of around £35K but their daughter is a temporary worker and at the moment is not working at all.
Where would they stand on Capital gains tax and/or income tax if they put the property in her name and then sell it when finished?
Where would they stand on Capital gains tax and/or income tax if they put the property in her name and then sell it when finished?
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Comments
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At first sight it looks like fraud...0
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if they keep doing this the revenue could consider it a business and demand income tax.
if they want to put the property in their daughter's name they can. presuming she doesn't live in it, when it is sold she will have a capital gains tax liability. if she did live in it as her principal private residence there would be no CGT to pay. if she said she lived in it but didn't, this would constitute fraud.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
as said above, there seems no advantage in putting the house in your daughters name only, unless she is going to live in it for some time. put it in all of yours names, up to four. then you all have the £8800 CGT threshold.0
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Think Apple. Think Differently. Think Leppa...0
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Thanks for all your replies. I'll now be able to give some advice to my friends. I am certainly worried that they may be making a huge mistake.0
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ceejayblue wrote:They are thinking of putting the mortgage in the name of their 24 year old daughter and once the property is finished they would sell it on. .......but their daughter is a temporary worker and at the moment is not working at all.
How would that work?0 -
advent1122 wrote:How would that work?
Thats what I was thinking, I'm not so sure that any mortgage lender would ever sanction something like that.0 -
Do as they were suggesting. Let the daughter buy it. Let the daughter use it as her main residence. Stick a bed in it stay a couple of nights a week if they feel the need. No CGT.
If she pays her coucil tax and gets all her mail sent to this address changes her bank and credit cards to this address. Then this is her main residence.
I await the flak ;-)0 -
""their daughter is a temporary worker and at the moment is not working at all.""
how does she think she can get a mortgage if she is not working ?0
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