Title Transfer

SuMcc

I need some help please! A couple of years ago, I bought a house outright with the proceeds from my divorce. Originally, it was for me to live in with my teenage son, However, as it was in a different area to my son's school, it dawned on him that he would have to change school and leave his friends. He was ok with that when I bought the house but closer to the time of moving he got terribly upset and begged me to stay close to his friends. I agreed to do that for a period of 2yrs so that he could do his GCSE's at his current school on condition that we moved to the bought house after the exams and he would have to take his A levels at a new school. Meanwhile, I am renting a property in his school catchment area. Well it now transpires that his choice of A levels is not covered at the new school so he will remain at the current school for yet another two years. It seems ludicrous to own a house and not live in it so I put it on the market and it sold almost immediately. Contracts have been signed and the sale is nearing completion. All this sounds perfectly normal - but there is a nasty surprise which has just reared its ugly head! Sorry for the long post but it's necessary to explain!
My two older sons have bled me dry financially over the years and I'm one of those mothers who find it difficult to say 'no' to them. I was worried that at some point they would coax me into perhaps obtaining a small loan or something against the house, should they need financial help in the future. So last year I transferred the house into my boyfriend's name in order to safeguard it against that outcome. Never gave it a second thought as it just seemed the logical thing to do. It is only now that we see the problem it has created!
My boyfriend went to see his uncle at the weekend and mentioned that we were selling the house as I wanted to purchase something closer to my son's school instead of continuing to rent. His uncle told him to stop the sale as he would be liable for CGT on the whole sale amount as it was a gifted property.
He came home and shouted, 'We've got to stop the sale! We've got to stop the sale!' and then explained why.
As I said, sorry for the long post but I really am in a bit of a pickle! I have alerted the estate agent and the buyers to the dilemma and they are very understanding and will wait in the hope I am able to sort out the mess.
Should I transfer the property back into my name or have my name added to the title alongside my partner's or what? Please help!

davidmcn

SuMcc wrote: »

His uncle told him to stop the sale as he would be liable for CGT on the whole sale amount as it was a gifted property.

I think this is the bit from the saga which you want advice on?

I don't think you've told us enough for us to tell whether or not your boyfriend is liable for CGT (it's possible he is), but even if he is, what is he wanting to do? Stopping your current sale probably just means he'd be liable for it some other time. If you've exchanged contracts (have you? Or just signed them in preparation for exchange?) then you'll be in breach of contract if you pull out - how much is that going to cost you?

tlc678910

I think capital gains tax applies from the value at the point the gift was made to the point of sale (and perhaps when you bought to when you gave it away)

Everybody also has a capital gains exempt allowance (this year it is £11,100 I believe from a quick google) Has the property gone up more than this? I believe the last 18 months of ownership is treated as if a person lived in the house and exempt from capital gains. Don't panic - speak to your solicitor.

Tlc

SuMcc

Contracts have been signed but not exchanged and completion date has not been set. If we were to pull out of the sale I would be liable for estate agents fees and my(boyfriends) legal fees and possibly search fees on the part of the buyers. I do not wish to stop the sale, just delay it. That's why I'm asking for advice as to whether it would just be better for me to transfer the property back into my name or have me included on the title alongside the boyfriend.

SuMcc

Thanks Tlc. I have spoken to the solicitor who was most unhelpful and merely stated something about conflict of interests and that I should enlist the help of a financial advisor as she only deals with conveyancing! Typical.

davidmcn

SuMcc wrote: »

That's why I'm asking for advice as to whether it would just be better for me to transfer the property back into my name or have me included on the title alongside the boyfriend.

Transferring title immediately before a sale just complicates things even further - purchasers (or rather, their lenders) usually want the seller to have owned the property for at least six months, and a transfer which looks like a gift will raise concerns about the risk of a gratuitous alienation (i.e. potential claims by creditors if your bf was insolvent at the time of the transfer), so requests for indemnity insurance etc. Don't think it magically solves the CGT issue anyway.

SuMcc

davidmcn wrote: »

Transferring title immediately before a sale just complicates things even further - purchasers (or rather, their lenders) usually want the seller to have owned the property for at least six months, and a transfer which looks like a gift will raise concerns about the risk of a gratuitous alienation (i.e. potential claims by creditors if your bf was insolvent at the time of the transfer), so requests for indemnity insurance etc. Don't think it magically solves the CGT issue anyway.

The purchasers are cash buyers and they are aware of the whole story and so are their solicitors who are prepared to put things on hold until I get this sorted. My boyfriend is most certainly not insolvent.

davidmcn

SuMcc wrote: »

My boyfriend is most certainly not insolvent.

I didn't say he was. The point is that you can't prove that to your purchasers, so it's pretty normal for them to want insurance to cover the risk that there had been something fishy going on.

SuMcc

With all due respect David Mcn, I think you are now just over-complicating matters. The purchasers are well aware of the situation that has arisen and do not require indemnities. I merely needed some sound (knowledgeable) advice on whether to transfer the house back into my name or not. Thank you for your input, but I think I need to speak to an actual financial advisor now.

dc197

Oh, David. Why must you make things so complicated? It would be far simpler if you just don't raise any point at all. Who do you think you are, making suggestions and offering advice, and to someone you don't even know!

Pixie5740

No OP, it was you who over-complicated matters by transferring the property into your bf's name due to your inability to say no to your sons.

I think davismcn is correct and that transferring the title back now will only complicate matters further. You might not have found your solicitor particularly helpful on this matter but your solicitor deals with the legal side of things not tax advice. For tax advice you'd need to speak with a tax specialist (accountant) before you go doing anything else to make the situation worse.

If you're renting another property is there anyone actually living in the one you're trying to sell just now?