A Taxing Mortgage Question

doccer1967

My daughter is going to University and I was thinking of buying a place to live that could also be an investment. Therefore is it possible for me to buy it on her behalf as a cash purchase but the owners are my daughters. Both of them are at uni, so have no income. If I did this who is liable for stamp duty - I assume my daughters. furthermore would it be the case that we would not be liable for the stamp duty surcharge? also am i correct that the potential issue is when/if my daughters want to buy another property and this will attract the surcharge (as by definition it will be their 2nd property)

all feedback greatly appreciated

dave:)

getmore4less

You gift the cash they buy the property.

AnotherJoe

doccer1967 wrote: »

My daughter is going to University and I was thinking of buying a place to live that could also be an investment. Therefore is it possible for me to buy it on her behalf as a cash purchase but the owners are my daughters. Both of them are at uni, so have no income. If I did this who is liable for stamp duty - I assume my daughters. furthermore would it be the case that we would not be liable for the stamp duty surcharge? also am i correct that the potential issue is when/if my daughters want to buy another property and this will attract the surcharge (as by definition it will be their 2nd property)

all feedback greatly appreciated

dave:)

Not if they sell it once they leave uni.

amnblog

Sounds like one daughter living in the property, one not. This makes the circumstances of the non resident daughter a factor, both with regard to SDLT and CGT.

As said above, presumably you will gift the case and they will pay the stamp, as opposed to buy the property, pay the stamp, and gift the property.

There are also options for you to mortgage a university property if that is of interest to you.

doccer1967

hi yes you are correct one daughter will live in the property, the other at home. they are both over 18. Sounds like I gift the monies for the property. how does the mortgage a university property work?
thanks

amnblog

There are some good products for University Accommodation.

You only need a 25% deposit and can put the property in your daughters name with you acting as Guarantor. (you can even get 100% lending if you put other property up as additional security).

She can have up to three people sharing and paying rent (these need not be students).

A nice way to get her used to some responsibility and less cash tied up by you.

ViolaLass

doccer1967 wrote: »

My daughter is going to University and I was thinking of buying a place to live that could also be an investment. Therefore is it possible for me to buy it on her behalf as a cash purchase but the owners are my daughters. Both of them are at uni, so have no income. If I did this who is liable for stamp duty - I assume my daughters. furthermore would it be the case that we would not be liable for the stamp duty surcharge? also am i correct that the potential issue is when/if my daughters want to buy another property and this will attract the surcharge (as by definition it will be their 2nd property)

all feedback greatly appreciated

dave:)

But then you mention a mortgage so how is it a cash purchase?

doccer1967

hi I can purchase the property with cash, which ties all my free cash up or could get a mortgage, pay a large deposit but still have monies for any unforeseen events

amnblog

It is down to how much cash you want to use.

If your daughter has flat mates paying rent she can earn some money back to toward her fees and probably won't be paying tax on it.