Giving away a property

mrscmd

Hello - apologies if this is in the wrong place.


I have a spare (inherited) property (valued at £120,000 7 years ago and now at least double that figure)


Can I just give it to my son to live in (he still lives with us at the moment) and hopefully survive 7+ years ?


Will he have to pay Cap. Gains when I die, if he continues to live in it?


If I gift it to him now, do I have to pay Cap. Gains myself?


Many thanks

Keep_pedalling

Nothing to stop you giving it away. If IHT is an issue for you then it will fall out iof you estate after 7 years.

The big issue for you is CGT, which you will be due to pay once you have gifted the property. If you don't have the liquid assets to meet that hefty tax bill, then probable better to sell up and give him a cash gift (sale price minus tax) then he can purchase a house of his choice.

missile

You could just rent the property to him for a peppercorn rent.

Browntoa

Can also be classed as deprivation of assets

teddysmum

Browntoa wrote: »

Can also be classed as deprivation of assets

....unless the person concerned still has ample resources to fully finance care, should they need it.

Keep_pedalling

missile wrote: »

You could just rent the property to him for a peppercorn rent.

That would avoid CGT, but in the long run could be more costly with IHT kicking in on the OPs death.

mrscmd

Hmm... as we thought, there is no easy solution.
I would happily sell the property, pay the CG and help youngest son buy - but our children have begged me not sell as they all love the house as it was grandma's and just across the road from us and full of memories. They all want their brother to have the house as a sort of pre-inheritance.
Plus all the palaver of selling/buying seems such a waste when we already have a property begging to be lived in.
Just have to hope 'they' raise the IHT threshold before I push up daisies, I suppose.

Keep_pedalling

Do not let sentimentality for a house get in the way of making the right decision, and whenever you do don't let it stay empty.

One solution which would avoid CGT, is for you to move into the spare house and give you current home to your son, or sell it and give him some of the proceeds.

For married home owners with children to leave things to the IHT allowance will rise to £1M over the next few years.

missile

Keep_pedalling wrote: »

That would avoid CGT, but in the long run could be more costly with IHT kicking in on the OPs death.

In the absence of a crystal ball and knowing more about OPs finances, one cannot predict whether an IHT bill in the future might be more or less than the CGT payable now?

p00hsticks

mrscmd wrote: »

Hmm... as we thought, there is no easy solution.
I would happily sell the property, pay the CG and help youngest son buy

Is the son in a position to contribute anything or get a small mortgage ? Perhaps instead of giving it to him you could sell it to him for just enough to allow you to cover the CGT bill ?

mrscmd

Thank you all... not prepared to sell our main home at the moment as husband and I love it here and the house across the road is too small for us.. I might end up killing him :-)
I think the best bet is to hope we survive until the hike in IT and hope house prices do not rise.
In any case the main house will have to be sold to share out the proceeds to our boys - 2 already have their own homes. Any IT (sadly there will be some even after the £1 mil. allowance) will come out of the sale.
I should have handed the house over to them when I first inherited.. hindsight et al!