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Selling house to son

Topnotch
Topnotch Posts: 7 Forumite
in House buying, renting & selling
My son currently lives with me in a house that I own outright. I want to move away and buy a smaller house. He wants to buy our current home from me for £450,000. Obviously no agents will be involved. I am happy to accept 75% of the money upfront and allow him to pay me the rest on a monthly basis, thereby dispensing with the need for him to obtain a mortgage. What is the cheapest and most straightforward way of going about this? Can I just take my name off the deeds and replace with his? Thanks for any advice.

Comments

  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Probably worth a loan agreement to document that part of the transaction.

    If the full market value is more than £450k there will be a gift element that will be a PET for IHT.
  • Hoploz
    Hoploz Posts: 3,888 Forumite
    If your son has got that much cash sitting around, he could buy the smaller house outright and you could just live in each others houses? Depending on what plans you both have for the future.
  • Topnotch
    Topnotch Posts: 7 Forumite
    That's an interesting suggestion! I'll give it some thought...
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Not living in a house you own messes with CGT.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    getmore4less wrote: »
    Not living in a house you own messes with CGT.
    It also makes things unnecessarily complicated for things like insurance.
  • Topnotch
    Topnotch Posts: 7 Forumite
    Yes, I thought there might be complications... Could I just transfer his name to the deeds, him give me the money he has, I buy a smaller house and he pays the balance off monthly? Or do solicitors have to be involved? Would he need to pay Stamp Duty?
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Hoploz wrote: »
    If your son has got that much cash sitting around, he could buy the smaller house outright and you could just live in each others houses? Depending on what plans you both have for the future.
    Not such a good idea.

    Capital Gains Tax. Potentially a tenancy scenario. Insurance......

    Don't go there.

    To transfer your property to your son:

    * TR1
    * ID1
    * AP1

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

    As suggested, a loan agreement for the additional amount is a good idea. You could even place a Charge on the property (just as a bank would for a mortgage). This would protect your loan.
  • Topnotch
    Topnotch Posts: 7 Forumite
    Thank you G_M, that is very helpful. Can I complete these forms myself or does a solicitor need to be involved?
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Topnotch wrote: »
    Thank you G_M, that is very helpful. Can I complete these forms myself or does a solicitor need to be involved?
    Read the link I provided!
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Topnotch wrote: »
    Would he need to pay Stamp Duty?

    Yes, no legal way round this as there is consideration
This discussion has been closed.
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