Property gift from non-resident

overthinker_2

Not sure if this is the right place or if my situation is too complex for a forum, but here goes....

An aunt (not related but very close family friend from Kuwait) would like to gift me her property in the UK. Here are some facts (that I think may be relevant):

* There is no outstanding mortgage on the property
* She has been using it as her place of residence (since she bought the property in 1985) in the UK during her visits (2/3 times per year)
* She is in good health and so assume that she will live for at least another seven years
* There will be nothing of monetary value exchanged
* Aim is to transfer the property before April 2015
* We (the wife, three children and I) are considering selling our current main residence and moving into the property indefinitely
* I believe currently foreigners do not pay CGT and as far as I know, in Kuwait, nationals do not pay CGT

Any opinions re the following for be of great help:

1) What is the legal process of transferring a property
2) Is it necessary to use a solicitor or is this a straight-forward
transaction?
3) What (if any) are the tax implications - SDLT, inheritance, CGT?
4) Eventually when we sell the gifted property, what would my base cost be (assuming we eventually let the property out in the interim, for upto 18 months)?
5) Is it worth consulting a tax advisor (and what fee structure do you think would apply)?
6) If the answer to 5) is 'yes', can anyone recommend an advisor from personal experience?

Thanks in advance.

xylophone

http://www.hmrc.gov.uk/international/tax-incomegains.htm

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

http://www.hmrc.gov.uk/cto/customerguide/page20.htm

https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1

https://www.gov.uk/government/organisations/land-registry

The above may help.

Finding an adviser https://www.unbiased.co.uk/ may be worth a look.

noisla

* I believe currently foreigners do not pay CGT and as far as I know, in Kuwait, nationals do not pay CGT

For tax, it matters whether you are "resident" (as defined under tax law). If your aunt regularly visits the UK and/or has a lot of ties here (such as owning a home), she might be considered a resident. It doesn't matter about citizenship or passport.


If you do decide you need a tax advisor, you should be able to contact several tax advisors to ask about their fees e.g. whether they could work on a fixed fee basis, or an hourly rate. If a fixed fee basis, check carefully what is in scope, and what will be deemed "extra" billable work. If an hourly rate, they should be able to give you an idea of the time it will take to look at different issues, and keep you regularly informed of time spent. Much time will be spent asking / chasing you for information, so being able to provide that upfront in a clear manner will help.

overthinker_2

noisla wrote: »

For tax, it matters whether you are "resident" (as defined under tax law). If your aunt regularly visits the UK and/or has a lot of ties here (such as owning a home), she might be considered a resident. It doesn't matter about citizenship or passport.


If you do decide you need a tax advisor, you should be able to contact several tax advisors to ask about their fees e.g. whether they could work on a fixed fee basis, or an hourly rate. If a fixed fee basis, check carefully what is in scope, and what will be deemed "extra" billable work. If an hourly rate, they should be able to give you an idea of the time it will take to look at different issues, and keep you regularly informed of time spent. Much time will be spent asking / chasing you for information, so being able to provide that upfront in a clear manner will help.

Thanks for the replies.

She is both resident and domiciled in Kuwait. The only ties she has in the UK is that she visits my family (to whom she is not related, just very good friends going back at least 35 years).

I will seek to confirm all of this with an advisor/solicitor - any recommendations?

overthinker_2

Guys

One more question if I may...

Is there a limit to the value of the property being gifted without triggering a tax liability (assuming the person gifting the asset survives at least seven years) - someone has suggested that anything over £325k will result in IHT exposure (even with seven years of survival)?

Just want to be sure that they're wrong?!

agrinnall

They're not wrong, but irrelevant if the donor is not liable to UK tax.

overthinker_2

agrinnall wrote: »

They're not wrong, but irrelevant if the donor is not liable to UK tax.

Even though the property is based in the UK?