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Stamp Duty vs Capital Gains tax
As123_2
Posts: 5 Forumite
Hi guys, 1st post here.
Looking for some advice from the moneysavers out there.
Currently in process of buying my "first" home. Didn't think too much about it until the solicitors asked about whether I owned any other houses. My parents bought a property and put it into a "trust" with myself and my other siblings a few years back. It was previously on rent but now is the main residence for one of my siblings (past 2 years). I was looking at removing my name from the deeds to avoid the extra stamp duty but was told I might be liable for capital gains tax?
I'm really stuck as to what to do? Is there any way around this? The 2nd hit will be really difficult to afford. Any help would be v much appreciated.
Looking for some advice from the moneysavers out there.
Currently in process of buying my "first" home. Didn't think too much about it until the solicitors asked about whether I owned any other houses. My parents bought a property and put it into a "trust" with myself and my other siblings a few years back. It was previously on rent but now is the main residence for one of my siblings (past 2 years). I was looking at removing my name from the deeds to avoid the extra stamp duty but was told I might be liable for capital gains tax?
I'm really stuck as to what to do? Is there any way around this? The 2nd hit will be really difficult to afford. Any help would be v much appreciated.
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Comments
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You need to investigate the exact ownership of the property. A trust is generally a separate legal entity. So if the trust owns it then you don't, even if you are the beneficiary of the trust.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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Are you sure? OP may not be a registered owner, but as beneficial owner would that not make the new property a 2nd property....?You need to investigate the exact ownership of the property. A trust is generally a separate legal entity. So if the trust owns it then you don't, even if you are the beneficiary of the trust.
Though it sounds like OP may actually be registerd owner.0 -
Thanks for posting back. I'm actually registered on the deeds with 2 of my other siblings. The other 2 have their share protected by a trust document (as they are <18).0
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That's fine- but if I take myself off the deeds- and remove myself from the trust document the additional SDLT should be nothing (if I'm correct). What is confusing is the capital gains tax... is there anyway around this?
Someone mentioned that you can get around the capital gains tax if one of the owners live in that house? Can anyone clarify or has experience of the capital gains?0 -
Is it your primary residence? If so, there isn't normally CGT payable on disposal. Who would you pass ownership to though if your siblings are both under the age of 18?0
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No it's not my primary residence. I'm currently living with my parents. Ownership would pass to my two older siblings (already on the deeds), with the other two still having their share covered by the trust document.0
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Surely giving away your share of that property would cost you a lot more than an extra 3% SD.
In addition to the asset value you are giving away, If the value of your share has increased more than £11,100 since your parents gifted you the house you will have a capital gain liability even if no money changes hands
PS is your sibling paying you rent?0 -
For what reason are you the legal owner? Are you solely holding the property in trust for your siblings or do you benefit from owning the property too (eg you get 20% of the eventual proceeds split when ultimately sold)?0
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The messes people get into trying to avoid tax in a cack handed amateur way .... and why if you own 20% of a house would you want to avoid 3% tax by getting rid of the 20% share which is almost certainly higher than the 3% ( and quite possibly paying CGT that's higher than the SDLT ?)0
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