Gifting a mortgaged property?

getmore4less

Thrugelmir wrote: »

Selling at under value between related parties is so obviously avoidance.

THat would make all gift(selling at zero) of property taxable clearly not the case.......

Senior_Paper_Monitor

In my opinion Thrugelmir's quote refers in general to 'contrived arrangements' for the purpose of avoidance rather than already established and demonstrable relationships such as family concessionary sale and right to buy.

PF0038

Thanks all for your thoughts.

My accountant advises that SDLT would not be payable if the property is gifted, but it can't be gifted with the mortgage currently secured on it.

Essentially, we want to live in this property and take over the mortgage payments from my father. We're just trying to ascertain what is permitted and what is is the most tax efficient permissible method, and to avoid any unexpected subsequent costs in future.

Appointment with financial advisor now booked....

TrickyDicky101

Thrugelmir wrote: »

Stamp Duty will be payable on the value of the transaction on a commercial basis as if it was at arms length. Therefore on £900k = £36k. The evasion loop hole was blocked in the 2013 Finance Act.

As already mentioned, there is no evasion involved in a concessionary purchase - what you state is incorrect.

Senior_Paper_Monitor

The mortgage cannot be 'transferred' - you will effectively be buying that portion of the property (he can't give it to you as he doesn't own it - the mortgage company does). As argued above - you will be liable for SDLT on that component.

ethank

Unless you have £400k in cash to pay off the mortgage, If you are using a lender, it will still be treated as a sale and it cannot be gifted.

Senior_Paper_Monitor

Sorry but the pendant in me insists that I reply again - it matters not one jot whether you use a replacement mortgage or your own cash to relieve your father of the liability of his £400K mortgage.


Either way it is a consideration of the transaction and to his benefit and therefore liable for stamp duty.

amnblog

Three points PF.


1. You have misunderstood your accountant ref the SDLT, or he/she has misunderstood the question.
2. This would be a 'concessionary purchase' not 'gifted deposit' which restricts your lending options more tightly.
3. You are right to get some financial advice on this.


If your father has any similar properties - I am available for adoption.

consultantuk29

PF0038 wrote: »

Thanks all for your thoughts.

My accountant advises that SDLT would not be payable if the property is gifted, but it can't be gifted with the mortgage currently secured on it.

Essentially, we want to live in this property and take over the mortgage payments from my father. We're just trying to ascertain what is permitted and what is is the most tax efficient permissible method, and to avoid any unexpected subsequent costs in future.

Appointment with financial advisor now booked....

Hi,

I wanted to follow up on your thread regarding gifting a property with outstanding mortgage.

I am in a similar situation, whereby looking to take on existing mortgage of a gifted property.

Did you manage to find a way to do that on your dad's property?

I will be seeking professional advice, but would be grateful if you can share your experience.

Thanks in advance.