Gifting a property

Runningfast

Asking for a family member.

A family member is wanting to gift a property to another family member (not me) can anyone advise how easy this is as a DIY effort or do they need a solicitor?

The property is owned outright in that there is no mortgage outstanding. The person gifting the property is gifting their main and only property, no other properties are involved (it is going from child to parent and not parent to child as is normally the case ...not sure if that matters?).

Looking online it seems that it can be done by filling out some forms and submitting to the land registry. We just can't work out which forms they need to complete.

00ec25

Runningfast wrote: »

Asking for a family member.

A family member is wanting to gift a property to another family member (not me) can anyone advise how easy this is as a DIY effort or do they need a solicitor?

The property is owned outright in that there is no mortgage outstanding. The person gifting the property is gifting their main and only property, no other properties are involved (it is going from child to parent and not parent to child as is normally the case ...not sure if that matters?).

Looking online it seems that it can be done by filling out some forms and submitting to the land registry. We just can't work out which forms they need to complete.

struggling to see the sense in a child giving their only/main home to their parent
- parent becomes owner and is much more likely to need means tested care home assessment long before the child could, At which point the property will form part of the capital assessment and the child could be forced to move out of the property if it has to be sold
- property forms part of parent's estate at death and may therefore be liable to inheritance tax before it comes back to the child as part of their inheritance (assuming of course parent intends to leave it to child rather than local cats home)
- the gift forms part of the child's estate if they pre-decease their parent and so may need to be sold to settle any IHT due on child's estate. Parent is homeless.

the answer to your question is here:
https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property

it requires you to submit 3 forms:

- TR1
https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1
- ID 1 which must be counter signed by a solicitor (or in person at a LR office)
https://www.gov.uk/government/publications/verify-identity-citizen-id1
- AP1
https://www.gov.uk/government/publications/change-the-register-ap1

G_M

00ec25 is spot on with both the info on how to do it, and the potential issues around future inheritance tax, means-tested care support etc.

It's not clear who will live in the house post-transfer, the donor, the recipient, or both, and his may have other implications.

gettingtheresometime

00ec25 wrote: »

struggling to see the sense in a child giving their only/main home to their parent
- parent becomes owner and is much more likely to need means tested care home assessment long before the child could, At which point the property will form part of the capital assessment and the child could be forced to move out of the property if it has to be sold
- property forms part of parent's estate at death and may therefore be liable to inheritance tax before it comes back to the child as part of their inheritance (assuming of course parent intends to leave it to child rather than local cats home)
- the gift forms part of the child's estate if they pre-decease their parent and so may need to be sold to settle any IHT due on child's estate. Parent is homeless.

the answer to your question is here:
https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property

it requires you to submit 3 forms:

- TR1
https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1
- ID 1 which must be counter signed by a solicitor (or in person at a LR office)
https://www.gov.uk/government/publications/verify-identity-citizen-id1
- AP1
https://www.gov.uk/government/publications/change-the-register-ap1

Getting rid of assets prior to a marriage / divorce ?

Runningfast

00ec25 wrote: »

struggling to see the sense in a child giving their only/main home to their parent
- parent becomes owner and is much more likely to need means tested care home assessment long before the child could, At which point the property will form part of the capital assessment and the child could be forced to move out of the property if it has to be sold
- property forms part of parent's estate at death and may therefore be liable to inheritance tax before it comes back to the child as part of their inheritance (assuming of course parent intends to leave it to child rather than local cats home)

the answer to your question is here:
https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property

it requires you to submit 3 forms:

- TR1
https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1
- ID 1 which must be counter signed by a solicitor (or in person at a LR office)
https://www.gov.uk/government/publications/verify-identity-citizen-id1
- AP1
https://www.gov.uk/government/publications/change-the-register-ap1

Thanks, the child is currently renting another property hundreds of miles away while paying 150% council tax plus maintenance fees, plus up keep on a studio flat that is currently left empty and has been for several years. They do no want to be a landlord after a bad experience a few years ago. The property can't be mortgaged in the current market well not with any of the high street lenders (they tried to remortgage it recently). Potential buyers have also struggled to get a mortgage on it due to being classed as a unique build...the living space seems to be smaller than the main lenders will lend on these days etc. The flat is awesome and fitted out to a very high specification but valued at below £45k due to area and building, size etc. value of the flat has crashed since 2008 and not risen!! They want to keep flat in family and the parent wants to own it leaving child to pursue other avenues including potentially moving to Canada later this year/early next.

Runningfast

G_M wrote: »

00ec25 is spot on with both the info on how to do it, and the potential issues around future inheritance tax, means-tested care support etc.

It's not clear who will live in the house post-transfer, the donor, the recipient, or both, and his may have other implications.

Parent will live in it after the transfer

Runningfast

gettingtheresometime wrote: »

Getting rid of assets prior to a marriage / divorce ?

Cynical!! the Child is single and has been living hundreds of miles away for the last few years for work. They have no intention of returning to the town that the flat is in at any point and currently in the process of going through the immigration process to move to Canada.

00ec25

Runningfast wrote: »

The property is owned outright in that there is no mortgage outstanding. The person gifting the property is gifting their main and only property, no other properties are involved (it is going from child to parent and not parent to child as is normally the case ...not sure if that matters?).

Runningfast wrote: »

Thanks, the child is currently renting another property hundreds of miles away while paying 150% council tax plus maintenance fees, plus up keep on a studio flat that is currently left empty and has been for several years. They do no want to be a landlord after a bad experience a few years ago. The property can't be mortgaged in the current market well not with any of the high street lenders (they tried to remortgage it recently). Potential buyers have also struggled to get a mortgage on it due to being classed as a unique build...the living space seems to be smaller than the main lenders will lend on these days etc. The flat is awesome and fitted out to a very high specification but valued at below £45k due to area and building, size etc. value of the flat has crashed since 2008 and not risen!! They want to keep flat in family and the parent wants to own it leaving child to pursue other avenues including potentially moving to Canada later this year/early next.

NOTE VERY CAREFULLY IT IS NOT THE MAIN HOME !!!!!!!!!!

you stated in the Op that this was the only/main home of the child. That is attempted tax fraud.

please explain exactly how many properties the child owns and who lives in them....
a) child's main residence is "hundreds of miles away". the fact it is rented does not detract from it being the main residence (unless, and only if, the property is owned by their employer and occupied by them as a condition of their employment)
b) child owns an empty studio flat
+
c) ?

parent owns ??? parent currently rents ???? parent will do what with where they currently live???

Child wishes to donate flat to parent . That is a disposal for capital gains tax purposes and, as it is not the childs main home (and clearly hasn't been for at least 2 years given its council tax status as attracting the premium empty rate) the child will be liable for CGT on its gain over the period in which the child owned it based on its current market value since the parent is a "connected person" and therefore actual price paid by parent (£0 as it's a gift) cannot be used in the CGT calculation .

you state it is of low value, nonetheless it must have a value and until you get that done professionally you will not know for sure how much, if any CGT you owe when you gift it to parent.

please provide exact details before you further waste our time on half truths and missing info

Runningfast

Don't you ever accuse me of lying i am giving you the info that I have.

The child owns 1 property but currently and has for years lived elsewhere in a rented property for work purposes. I used the term main and only property obviously wrongly about the flat but was trying to portray the fact that it was the only property they own. My original post had more info initially but I edited it before you responded and obviously didn't read through properly after the edit.

The parent does not own a property but currently rents. The parent would live in the property as there main residence.

The most recent valuation was approx 40k given to it by a surveyor sent out by nationwide during a recent attempt to remortgage. 2 local estate agents value as up to 45k but state cash buyers realistically 35-40k it has been on the open market for several years now. Several failed mortgage purchases but no cash buyers as of yet.

I'm getting the impression that it would be best for them to do the transaction via a solicitor or similar professional who can advise and work out the tax rate that needs to be paid. If tax has to be paid it wouldn't be an issue for either party involved. I'm not sure how it is worked out.

I'm not sure if 35-45k valuation is a loss on what they paid or profit.

00ec25

Runningfast wrote: »

Don't you ever accuse me of lying i am giving you the info that I have.

The child owns 1 property but currently and has for years lived elsewhere in a rented property for work purposes. I used the term main and only property obviously wrongly about the flat but was trying to portray the fact that it was the only property they own. My original post had more info initially but I edited it before you responded and obviously didn't read through properly after the edit.

The parent does not own a property but currently rents. The parent would live in the property as there main residence.

The most recent valuation was approx 40k given to it by a surveyor sent out by nationwide during a recent attempt to remortgage. 2 local estate agents value as up to 45k but state cash buyers realistically 35-40k it has been on the open market for several years now. Several failed mortgage purchases but no cash buyers as of yet.

I'm getting the impression that it would be best for them to do the transaction via a solicitor or similar professional who can advise and work out the tax rate that needs to be paid. If tax has to be paid it wouldn't be an issue for either party involved. I'm not sure how it is worked out.

I'm not sure if 35-45k valuation is a loss on what they paid or profit.

so you are relaying info 2nd hand and have no real idea of the underlying facts and figures. You may not be lying, but you are misleading us through failure to give the precise circumstances.

your best bet is to recommend to them that they do indeed appoint a solicitor to deal with the transfer and tell the solicitor the full facts so that a correct tax calculation may be worked out. Attempting to DIY it via 3rd party info such as you can provide may be counter-productive as you now realise.

Given the trivial values you mention it is very probable that no CGT will actually be payable, but until the precise calculation is done no one knows for sure!

getmore4less

If the parent is planning to move in anyway they should do so ASAP and get the council tax down.