How to add a new person to my house deed?

xylophone

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

http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

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

The above will be worth a look.

xylophone

And if you employ a solicitor you will need to pay his fees.

booksurr

sarbaloosa wrote: »

Thanks for this.

The house is worth about £180K.

So I would be paying CGT or my son? How much would this roughly be?

you and your son are defined as "connected persons" for the purposes of CGT meaning that a "CGT event" has occurred when property title changes. Its market value must be used in lieu of whatever actually passes between the two of you, ie if sold for a discount, or given for free, the "sales value" is the market value not the actual amount paid

it is not your main home (and by the sounds of it never has been?) therefore you will have to pay CGT at the date you transfer a share to your son. That is based on the gain to date which is the difference between its original purchase price (less SDLT, EA fees and legal fees at time of purchase) and its current market value (less any legal fees incurred for the transfer). Obviously the gain is then split between your retained share and your gifted share, it is the latter figure which the tax will be charged on

as for how much, it depends on your "total income" for the tax year, that figure is your taxable earnings (job etc) plus the gain. If that total is <£41,865 you will pay CGT at 18%, if more than that you will pay CGT at 28% on the amount by which the total exceeds £41,865.

a will is relevant if you own the property with your son as tenant in common as a will is then needed to define who gets your share on your death. If owned as joint tenants he automatically gets it so a will is irrelevant in respect of that property but may or may not be needed depending on who else has a claim to your estate

as for IHT the threshold for you is £325,000. You would need to provide more info about your wife to give a proper answer re total IHT exposure. However as you do not live in the property (so we can ignore the rules about reservation of benefit) and your son is now its part owner, a very simple answer is that your residual share will be part of your estate along with anything else you own and if that is more than £325,000 (or £650,000 depending on your wife's status) then IHT will be paid by your estate and if the estate lacks the cash to pay the tax then things will have to be sold to raise cash

booksurr

BobQ wrote: »

IHT i.... Of course your main residence is exempt.

not from IHT it isn't, you are confusing yourself with CGT exemption for a main home

Land_Registry

xylophone has linked you to our online material but here is the link to the specific part re transferring ownership
https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property

There are completion notes and videos to assist with the form filling which can be fairly straightforward to complete.

As you are though now aware there are other issues to consider not only re tax but also what may happen in the future re wills etc so always best to get some legal/financial advice as well

sarbaloosa

booksurr wrote: »

you and your son are defined as "connected persons" for the purposes of CGT meaning that a "CGT event" has occurred when property title changes. Its market value must be used in lieu of whatever actually passes between the two of you, ie if sold for a discount, or given for free, the "sales value" is the market value not the actual amount paid

it is not your main home (and by the sounds of it never has been?) therefore you will have to pay CGT at the date you transfer a share to your son. That is based on the gain to date which is the difference between its original purchase price (less SDLT, EA fees and legal fees at time of purchase) and its current market value (less any legal fees incurred for the transfer). Obviously the gain is then split between your retained share and your gifted share, it is the latter figure which the tax will be charged on

as for how much, it depends on your "total income" for the tax year, that figure is your taxable earnings (job etc) plus the gain. If that total is <£41,865 you will pay CGT at 18%, if more than that you will pay CGT at 28% on the amount by which the total exceeds £41,865.

a will is relevant if you own the property with your son as tenant in common as a will is then needed to define who gets your share on your death. If owned as joint tenants he automatically gets it so a will is irrelevant in respect of that property but may or may not be needed depending on who else has a claim to your estate

as for IHT the threshold for you is £325,000. You would need to provide more info about your wife to give a proper answer re total IHT exposure. However as you do not live in the property (so we can ignore the rules about reservation of benefit) and your son is now its part owner, a very simple answer is that your residual share will be part of your estate along with anything else you own and if that is more than £325,000 (or £650,000 depending on your wife's status) then IHT will be paid by your estate and if the estate lacks the cash to pay the tax then things will have to be sold to raise cash

Hi Book,

Thank you for this and I am also thankful to all other contributors too.

The property I wish include my son on was left by my late mother. I currently am not working and have no taxable income.

If I am following your comment correctly, the only thing I will have to pay for is CGT as I will have triggered a 'CGT event' by wanting to include my son on the deed? Is that correct.

The amount I pay is based on the original value (£20,000) and the current value (£180,000) = £160000.

Do I have to pay a legal fee for transfer? How much is this? Based on the above information, how much CGT would I need to pay?

Many thanks,

Land_Registry

The fee for registration of a Transfer from you to you and your son would be assessed under Scale 2 on half the current market value (£90K) - £40

BobQ

booksurr wrote: »

not from IHT it isn't, you are confusing yourself with CGT exemption for a main home

Correct and corrected. Sorry OP for the confusion.

BobQ

booksurr wrote: »

a will is relevant if you own the property with your son as tenant in common as a will is then needed to define who gets your share on your death. If owned as joint tenants he automatically gets it so a will is irrelevant in respect of that property but may or may not be needed depending on who else has a claim to your estate

Surely the share of any joint ownership as tenants in common is defined in the land registry entry or in a Deed of Transfer when the change happens. You do not need a Will to own property as tenants in common, however desirable it is for people to have a Will.

xylophone

Surely the share of any joint ownership as tenants in common is defined in the land registry entry or in a Deed of Transfer when the change happens. You do not need a Will to own property as tenants in common, however desirable it is for people to have a Will.

See

http://www.actlegal.co.uk/faq/buying-house-faqs/35/