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Can I transfer share of house to DD?
Poppy9
Posts: 18,833 Forumite
Four years ago we inherited 50% of property and bought out the other party with a small BTL mortgage.
The property has been rented since and we have used the money to support DD in uni. She now has just one year to go in Uni and our intention was always for her to have this house.
Can we just transfer it to her. We can afford to repay mortgage in full first.
The property has been rented since and we have used the money to support DD in uni. She now has just one year to go in Uni and our intention was always for her to have this house.
Can we just transfer it to her. We can afford to repay mortgage in full first.
~Laugh and the world laughs with you, weep and you weep alone.~:)
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Comments
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You can gift it to her.
You would need to consider potential capital gains tax on the profit on disposal and potential inheritance tax.
From a CGT point of view it would be valued as though sold at market value.
Inheritance tax could be a factor if you die within 7 years of the gift and your estate (adding back the gift) is worth more than the inheritance tax threshold.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
So what would be capital gains approximately.
When we inherited house OH had 25%, myself 25%, SIL and BIL 25% each as this was the way MIL wrote will.
OH and myself bought out SIL & BIL for £45k. We had a mortgage for £25k. We have owned for 4 years and current value is about £120k.
Regarding IHT we've been told that DD will be okay as she gets 2 allowances from OH and me.
Our current home plus savings is about £500k plus we both have pensions (OH already in receipt of his). My DiS would add £100k to this pot.
Other option is to give her 50& share in property now which is OH preferred choice but not sure this of any benefit. ~Laugh and the world laughs with you, weep and you weep alone.~:)
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The base value of the house for CGT would be half the probate value plus the £45k. Assuming you bought your BIL and SIL out soon after probate I estimate £90k. So the capital gain is £30k minus buying and selling costs and any 'improvement' but not just maintenance. You've never lived in the property so there's no 18 months exemption or lettings relief but if it's in joint names you'll probably have about £1,000-1.500 to pay in CGT.0
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Four years ago we inherited 50% of property and bought out the other party with a small BTL mortgage.
The property has been rented since and we have used the money to support DD in uni. She now has just one year to go in Uni and our intention was always for her to have this house.
Can we just transfer it to her. We can afford to repay mortgage in full first.
Does she want it?
I'm not sure I would have wanted the responsibilities of being a landlord at 21, or are you going to manage it?
I certainly wouldn't have wanted a house of my own to live in without knowing where I might have been working.0 -
The base value of the house for CGT would be half the probate value plus the £45k. Assuming you bought your BIL and SIL out soon after probate I estimate £90k. So the capital gain is £30k minus buying and selling costs and any 'improvement' but not just maintenance. You've never lived in the property so there's no 18 months exemption or lettings relief but if it's in joint names you'll probably have about £1,000-1.500 to pay in CGT.
Brilliant thank you ~Laugh and the world laughs with you, weep and you weep alone.~:)
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Does she want it?
I'm not sure I would have wanted the responsibilities of being a landlord at 21, or are you going to manage it?
I certainly wouldn't have wanted a house of my own to live in without knowing where I might have been working.
She knows we always bought it outright to finance her through Uni and to get her on the property ladder. She's an only child so we are happy to be able to help her. I doubt she will want to sell when she finishes uni so we will continue to manage it and she has the income.
When she does want to sell she will be able to do so quickly as it's in a great school catchment area so popular even though it's ex LA. ~Laugh and the world laughs with you, weep and you weep alone.~:)
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Can you explain that? Why half the probate value?The base value of the house for CGT would be half the probate value plus the £45k. .
OP does not say when the buy-out happened exactly, but assuming it was at same time as probate (or very shortly after), would the base value not = the probate value, since that is the value when the OP became took ownership? There might be a slight difference if the value had changed between date of probate and date of buy-out.0 -
Can you explain that? Why half the probate value?
OP does not say when the buy-out happened exactly, but assuming it was at same time as probate (or very shortly after), would the base value not = the probate value, since that is the value when the OP became took ownership? There might be a slight difference if the value had changed between date of probate and date of buy-out.
We used a solicitor for probate and we bought out SIL at that time so when everything was settled we owned the house. OH then sorted the house to enable us to rent it as it had been adapted for FIL.
We had in fact paid over a 1/4 of purchase prices over 20 years prior to them dying as they wanted to buy the house under RTB but didn't have the money so my OH and SIL gave them 50% of the cost on the agreement that after 3/5 years they would then own a 1/4 share each and the inlaws retain 50%. They refused to honour this though and we didn't pursue the issue as they were saying that OH and SIL could make them homeless and it had potential to cause family rift. There was never any intention to sell house from under them or charge them rent, it was just a future investment for us and helped them out by saving them paying rent in their retirement. ~Laugh and the world laughs with you, weep and you weep alone.~:)
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