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Buying flat in someone else's name
Amychris7
Posts: 5 Forumite
How would it work if my mother bought a flat but put the deeds in one and my brothers name but she still took the monthly rental income and claimed it on a self assessment form? Would that be allowed?
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Comments
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Why would she want to do that?0
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Is your mother a cash buyer or will she require a mortgage?0
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So it would be an investment for us for the future when we don't require the rental right now but she does. She would be a cash buyer0
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she can give the legal interest in the property to you whilst at the same time retaining in the beneficial interest in the income for herself
implications are:
1. she will have the liability for Capital Gains Tax when/if the property is sold since she is the beneficial owner
2. they will remain as part of her estate for inheritance tax purposes for the next 7 years since they are a PET (potentially exempt transfer). If she dies after then they will legally be yours and her estate will be free of IHT liability, if she dies before the 7 years are up their value (on a sliding scale) will be included in her nil rate IHT band assessment
3. she will be subject to deprivation of assets review if she claims means tested benefits
4. as beneficial owner she is liable for income tax on the net profit arising from letting them http://www.hmrc.gov.uk/manuals/tsemmanual/tsem9010.htm0 -
The taxation on the rental profits are supposed to be in line with the ownership.0
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