House swap

Matt002

Evening. My parents and I would like to swap houses as they don't want as big a place to look after and I need more space.

They own their house outright and I have a token £150 left on my mortgage.

Can we effectively gift each other our properties and then swap the possesions over etc? Would this be above board? Any stamp duty to pay? Any risks or benefits we havent thought of?

Pixie5740

Matt002 wrote: »

Evening. My parents and I would like to swap houses as they don't want as big a place to look after and I need more space.

They own their house outright and I have a token £150 left on my mortgage.

Can we effectively gift each other our properties and then swap the possesions over etc? Would this be above board? Any stamp duty to pay? Any risks or benefits we havent thought of?

Your mortgage would need to be cleared first even if it is just £150. SDLT will be due from both parties based on the consideration being paid which in your cases would be the value of the properties.

Matt002

Thanks so SDLT is definitely due from us both even if we gift each other the properties?

I wondered about the gifting as this page
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#gift
Says:
You!!!8217;re given property as a gift
If you get property as a gift you won!!!8217;t pay SDLT as long as there!!!8217;s no outstanding mortgage on it. But if you take over some or all of an existing mortgage, you!!!8217;ll pay SDLT if the value of the mortgage is over the SDLT threshold.

Pixie5740

Matt002 wrote: »

Thanks so SDLT is definitely due from us both even if we gift each other the properties?

I wondered about the gifting as this page
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#gift
Says:
You!!!8217;re given property as a gift
If you get property as a gift you won!!!8217;t pay SDLT as long as there!!!8217;s no outstanding mortgage on it. But if you take over some or all of an existing mortgage, you!!!8217;ll pay SDLT if the value of the mortgage is over the SDLT threshold.

You're not being given property as a gift though you're being given a property in exchange for another property.

SDLT_Geek

There are special SDLT rules on swaps / exchanges of property. They say that each person pays SDLT on the higher of:
(a) the value of the property acquired
(b) the value of what is given in return.

So I would expect you to pay SDLT on the value of the house you receive from your parents and them to pay SDLT on the value of the property they acquire from you.

Cheeky_Monkey

Just wondering:

How old are your parents and are they in good health?

What is the value of each house?

Tom99

[FONT=Verdana, sans-serif]The other thing to bear in mind is that the difference in value will count as a PET gift from your parents for Inheritance Tax Purposes.[/FONT]