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Renting inherited property FOC to family
gillybean129
Posts: 165 Forumite
I inherited my family home in 2015, owned outright, and rented since 2015. Also have a property in joint names with partner, mortgage all but paid off.
My daughter has returned from uni, things are fraught in our house and if she gets a job I am considering letting her have this property on a reduced/rent free basis.
Current tenant on rolling contract so would need 2 months notice at least.
Is this viable? It would be short term until she gets on her feet, I understand I would have a reduced income but I think this is preferable for the situation we are in.
Is this classed as 'peppercorn' rent and what are the implications other than of course CGT long term for me?
My daughter has returned from uni, things are fraught in our house and if she gets a job I am considering letting her have this property on a reduced/rent free basis.
Current tenant on rolling contract so would need 2 months notice at least.
Is this viable? It would be short term until she gets on her feet, I understand I would have a reduced income but I think this is preferable for the situation we are in.
Is this classed as 'peppercorn' rent and what are the implications other than of course CGT long term for me?
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Comments
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gillybean129 wrote: »I inherited my family home in 2015, owned outright, and rented since 2015. Also have a property in joint names with partner, mortgage all but paid off.
My daughter has returned from uni, things are fraught in our house and if she gets a job I am considering letting her have this property on a reduced/rent free basis.
Current tenant on rolling contract so would need 2 months notice at least. - and upto 40 weeks to evict.
Is this viable? It would be short term until she gets on her feet, I understand I would have a reduced income but I think this is preferable for the situation we are in. - how short term? you couldn't evict for approx. 10 months
Is this classed as 'peppercorn' rent and what are the implications other than of course CGT long term for me?
Peppercorn rent? It's rent, doesn't matter if it's your daughter or my second cousin.0 -
No different to any other rental.
You're your daughter's landlord.
If/we you sell, you'll be liable for CGT as it's not your main home - but that's already the case.
* New landlords: advice, information & links0 -
You may need to check with your insurance but otherwise you can rent for as little as you like.
If you charge nothing it is not a tenancy and there may be contractual difficulties if it came to eviction.
Your daughter would be unable to claim housing benefit.0 -
You may need to check with your insurance but otherwise you can rent for as little as you like.
If you charge nothing it is not a tenancy and there may be contractual difficulties if it came to eviction.
Your daughter would be unable to claim housing benefit.
Possibly, the property is currently rented, so the council would struggle to claim a contrived tenancy in these circumstances.0 -
She has no intention of claiming any benefits whatsoever0
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Obviously if its a free rent arrangement, I would forgo any tax benefits on the gardener and maintenance, nut I would have no income to offset anyway (other than my usual paid employment which wouldn't apply)
She would be paying all other bills0 -
Bl**dy h*ll.gillybean129 wrote: »Obviously if its a free rent arrangement, I would forgo any tax benefits on the gardener and maintenance, nut I would have no income to offset anyway (other than my usual paid employment which wouldn't apply)
She would be paying all other bills
Give her a fork and get her to do te gardening......0 -
At the moment your daughter has not found employment and is not claiming benefits so is relying on savings/parental support?
What is making the situation at home "fraught"?0 -
Constant friction between her and Father, I'm in the middle
She graduated less than a month ago, he's on at her about jobs, I could understand it but she's a great girl, studied hard got a first, he's unreasonable but that's how it is.0 -
She graduated less than a month ago, he's on at her about jobs,
Is this because she is relying on him/you for financial support and is not job searching?
If she is job searching then she is doing her best so why the nagging?
Does he expect her to claim JSA while she looks and she is unwilling to do so?
Could she stay with other relatives/friends while she job searches?
If the only problem is the lack of a job then if she gets one, friction at home will cease so she won't need to occupy your let property?0
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