Re: Transfer of ownership

krishijones

How do we go about transferring a mortgage-free flat (recently bought in cash at £123k), without using a solicitor, in Scotland? There will be no exchange of money.

We've been told the process is simple. But is it though? Is the process really simple and straightforward?

What forms do we use? Are they:

(a) transfer of equity form TR1 for the Land Registry, and

(b) an inland revenue form, to say no money has been exchanged hands. How do we go about this?

I'd be grateful if you could kindly give us some advice please. Thanks.


Our story:

My parents just bought their second property outright (without mortgage on it). They got this money by borrowing more on their current property. I currently live in the second property and plan to rent the other 2 rooms. But my parents will be liable for tax on rent by doing so. Hence, we are thinking of transferring the flat to my name, so I become a resident landlord, and don't worry about HMO. The taxable rent from the flat will be less than £10k, and being a student, I don't earn anything, so £10k will be within the personal allowance I get. Hence we pay no tax!

Pixie5740

Given the Land Registry only registers ownership of land and property in England and Wales you won't get very far completing a TR1 form. You'll need the Registers of Scotland.

https://www.ros.gov.uk

krishijones

Oh god! thank you! Any idea, what would be an equivalent form for Scotland?

Pixie5740 wrote: »

Given the Land Registry only registers ownership of land and property in England and Wales you won't get very far completing a TR1 form. You'll need the Registers of Scotland.

https://www.ros.gov.uk

G_M

krishijones wrote: »

Oh god! thank you! Any idea, what would be an equivalent form for Scotland?

errrrr......

https://www.ros.gov.uk

getmore4less

So they give you a property and pay the extra borrowing from their own money?

booksurr

krishijones wrote: »

My parents just bought their second property outright (without mortgage on it). They got this money by borrowing more on their current property. I currently live in the second property and plan to rent the other 2 rooms. But my parents will be liable for tax on rent by doing so. Hence, we are thinking of transferring the flat to my name, so I become a resident landlord, and don't worry about HMO. The taxable rent from the flat will be less than £10k, and being a student, I don't earn anything, so £10k will be within the personal allowance I get. Hence we pay no tax!

a few issues you may or may not have considered

parents: will have a declare the sale for Capital Gains Tax purposes - unlikely any will be payable given they have "just" bought it, but it's a disposal at market value nonetheless

you:
- given it is in Scotland have you checked what rules your particular council applies to HMO. Total certainty that it is an HMO for council tax purposes

- as the owner with more than one lodger you lose your claim to private residence relief and will therefore be exposed to CGT in your name when you sell it

- as a resident LL (wef April 2016) your rent a room allowance increases from the £4,250 it is currently to £7,500 tax free.

davidmcn

krishijones wrote: »

Oh god! thank you! Any idea, what would be an equivalent form for Scotland?

G_M wrote: »

errrrr......

https://www.ros.gov.uk

Well, not quite, as there isn't a directly equivalent form. You need to draft your own Disposition deed and once signed send that to the registers together with their application form.

And it's not the Inland Revenue, or even HMRC, but Revenue Scotland in relation to "stamp duty" or Land & Buildings Transaction Tax as it now is.