Disposal by gift and SDLT surcharge refund + indirect charge mortgage

getmore4less

money_talks wrote: »

Thanks. I see your view. I don't see how what we are doing here can be classed as fraud, tax avoidance (not evasion) maybe, but that is legal.
You say "for no good reason", but what are the good reasons for gifting a property between family members? Isn't it quite a common thing to gift your property to your children to avoid inheritance tax?
Maybe I'm missing something here?

If you gift a property you live in it has no IHT benefit, in many cases it increases the potential tax liabilities.

AnotherJoe

money_talks wrote: »

Thanks. I see your view. I don't see how what we are doing here can be classed as fraud, tax avoidance (not evasion) maybe, but that is legal.
You say "for no good reason", but what are the good reasons for gifting a property between family members? Isn't it quite a common thing to gift your property to your children to avoid inheritance tax?
Maybe I'm missing something here?

Only by the clueless (assuming they continue to live in it after "gifting" . And often combined with the fact the property values are such that there wouldn't have been any IHT Nowadays it's most generally done to try to avoid care home fees, and usually, from what you read here, equally ineptly.

money_talks

Thanks guys, giving more stuff to think about.

getmore4less wrote: »

You will be OK when she dies if it comes to you then.

Why would she want to give away her home before then?

I have siblings, and after the deposit paid and the paying off the remaining mortgage, I would have put in 80% of the cost of the house, so I think it would be nice/fair that I receive that share instead of my siblings. I guess she could leave a will and specify this.

getmore4less wrote: »

If you gift a property you live in it has no IHT benefit, in many cases it increases the potential tax liabilities.

Her assets are below threshold at the moment, so we are not actually worrying about IHT.

The deprivation of assets for care costs is a worry though. I'm hoping she doesn't ever need care or for at least another 20 years, and will probably move in with us eventually anyway. So if she's fit and healthy when gifting the property, as I understand it will not be counted as deprivation of assets?

The surcharge we paid is over £20k, so I still think it's worth exploring the gifting option.