Transferring Property as a Gift to Nephew

franskiel

Hi there,

I am a foreign citizen, with a property in the UK (England). The mortgage has recently been paid off and I am now hoping to give the property to my sister's son as a 'gift'.

What is the best way to go about this? And how is the transfer affected by my being a non-UK/EU citizen?

According to the Stamp duty govt website I should not have to pay any stamp duty if there is no mortgage. (am not allowed to post links as a new user)
Are there any other taxes that will have to be paid?
Further, how will this transfer affect any HMRC fees if my nephew wishes to sell the property in the near future?
The house was initially purchased in 1996.

Thanks for your help. I am pretty clueless when it comes to these matters.

Thanks!!

G_M

Complete these forms and send to the Land Registry. Note the requirement to prove ID:

* TR1
* AP1
* ID1

See:
https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1

I don't see that your nationality or residnecy is an issue.

If there is no monetary value (ie nephew pays you nothing) there is no SDLT to pay.

As a gift, it might be relevant to Inheritance Tax liability if you die within 7 years - though as non-UK citizen I don't know if your Estate would be liable to IHT. You'd need tax/Estate planning advice.

If nephew later sells, the fact he received the property as a gift will make no difference.

Keep_pedalling

Unless this is an area of the UK where property values have stagnated over the last 10 years, then capital gains tax may be an issue.

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

G_M

Keep_pedalling wrote: »

Unless this is an area of the UK where property values have stagnated over the last 10 years, then capital gains tax may be an issue.

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

Good point, though it's not clear what the property has been used for till now.

getmore4less

residence and domicile can impact the tax situation.

franskiel

Seems quite straight forward!

thanks a lot

franskiel

The property is a house which at the moment is being rented out. Does this mean that tax will inevitably have to be paid?

Keep_pedalling

franskiel wrote: »

The property is a house which at the moment is being rented out. Does this mean that tax will inevitably have to be paid?

No, that depends on a number of factors. Have you ever lived in your UK house? If so how long for?

booksurr

franskiel wrote: »

Seems quite straight forward!

the transfer is straightforward, but your tax position is not !

1. when did you cease to reside in the UK?
Your EC citizenship means you are a "non domiciled" person and so are subject to special rules in respect of Capital Gains Tax if you are no longer physically living in the UK

2. a non dom is liable to CGT on the gain made since 5th April 2015. You are exempt on the gain made before that date assuming you no longer live in the UK

3. as a non dom you must report the sale to HMRC within 30 days of giving it to your nephew.

4. as he is your nephew you are "connected persons" so although no money changes hands, for CGT purposes the gain is worked out on the difference in market value between what it was worth on 5th April 2015 and what is was worth on the day you gave it way. You may need professional help in working out the 2015 value if you did not get one done at that time (many non doms did as they knew the rule was changing at that time)

5. were you living in the property after 5th April 2015 or was it already let by then? Have you ever lived in the property between 1996 - April 2015?

6. you can claim your CGT allowance, and depending on answers to Q5 you may also be able to claim other relief as well, so you may actually not have any tax to pay, but you must still report it

read: https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

Savage95

Can anyone help? I believe my mother is in a similar position; she owns two properties, the one she resides in and another which my sister lives in. My sister does not pay rent to our mother ( or rather has not paid any rent since 2013). She is really unhappy where she lives (i.e. the location of this second house) and we are trying to persuade our mother to sell this second house in order that my sister can move to a more desirable area and particularly nearer to her daughter, but our mother doesn't want (as most people!) to pay the government what I assume would be Capital Gains Tax. Is there any way around this legally that I can explain to our mother as my sister is now getting highly stressed in her current situation? Thank you everyone

booksurr

Savage95 wrote: »

Can anyone help? I believe my mother is in a similar position; she owns two properties, the one she resides in and another which my sister lives in. My sister does not pay rent to our mother ( or rather has not paid any rent since 2013). She is really unhappy where she lives (i.e. the location of this second house) and we are trying to persuade our mother to sell this second house in order that my sister can move to a more desirable area and particularly nearer to her daughter, but our mother doesn't want (as most people!) to pay the government what I assume would be Capital Gains Tax. Is there any way around this legally that I can explain to our mother as my sister is now getting highly stressed in her current situation? Thank you everyone

your sister is a grown adult with children of her own?

is your mother keeping her imprisoned in the property? I cannot see any connection between sister's inability to make her own decisions and lead her own life, and your mother's ownership of a property which she does not wish to sell (at the moment)

if your sister does not have the money to rent/buy a place of her own can you help her?

you are not going to find a legal solution to making your mother sell her property. Has there been a family breakdown meaning you cannot talk to her?