Being part gifted a property - advice needed

Technoholic

AnotherJoe wrote: »

Wow. Second person in a week entering into BTL at a known upfront ongoing loss.

With respect, Is that your problem?

All I came here to ask was what I need to know to complete the process, I appreciate advice, positive or negative, but this is neither.

AnotherJoe

No it's of course it's not my problem. Just strange that someone has come onto money saving expert for "advice" and then said "shuddup your face I'm deliberately losing money for sentimental reasons associated with a rental flat, that I will be subsidising strangers to live in. "

Technoholic

Well I asked for advice regarding how to buy it and associated costs, not what I do with it subsequently, although I’m not sure how I’m subsidising strangers by letting it out, I said I didn’t car about profits right now, I didn’t say I’d let it out cheaply, I said anything I make will be a bonus so by letting it at market rates even any small profit I make will be a bonus, after recouping my investment costs of course.

SDLT_Geek

Technoholic wrote: »

I'm aware about the extra SDLT, the tax implications, etc but when it comes to the details, that is what I was asking about.

I need to pay the higher rate of SDLT on the full 200k

Higher rate SDLT on £200,000 is £7,500. You might be able to get the SDLT down to £2,910 if you can structure the purchase and the mortgage as a concessionary purchase for £97,000. See these threads: https://forums.moneysavingexpert.com/discussion/5946894/concessionary-purchase-stamp-duty and https://forums.moneysavingexpert.com/discussion/5941446/concessionary-purchase

Technoholic

SDLT_Geek wrote: »

Higher rate SDLT on £200,000 is £7,500. You might be able to get the SDLT down to £2,910 if you can structure the purchase and the mortgage as a concessionary purchase for £97,000. See these threads: https://forums.moneysavingexpert.com/discussion/5946894/concessionary-purchase-stamp-duty and https://forums.moneysavingexpert.com/discussion/5941446/concessionary-purchase

Thanks that’s very useful reading. I think the aim is to structure it like this so it’s good information.

SDLT_Geek

There is another article about concessionary purchase / gifted equity here. https://www.blakemorgan.co.uk/news-events/blog/bank-mum-and-dad-concessionary-purchases/

AdrianC

Technoholic wrote: »

AdrianC wrote: »

YES, IT IS.

It is 100% a business transaction. Your father is looking to close his business down and sell the business asset. You are looking to buy the business asset and start in the same business. The business is residential letting.

Sure, you can decide to run an unprofitable business for the sake of emotion if you want, but it makes for a very bad business decision on so many levels...

You can choose to see it that way if you want.

I'm not choosing anything. I - and you - have to see it that way because that's the reality of the situation.

Residential letting is a business. Full stop. End of.
A property that you are letting is a business asset. Full stop. End of.

Tell me I'm wrong in that.

I see it in the same way as if he gifted me an heirloom

Fine - but why would you then rent that heirloom out...?

Can you not see that this is the bit that's going to cause you problems?
You have emotion invested in the flat. That makes it a really bad business asset - because you are going to have emotion invested in the let. It's your asset - it's your tenant's home. They have an expectation of quiet enjoyment of it. While they live there, what they do there and to it is their business. If it's left at the end of the tenancy in worse condition than reasonable wear and tear, you can charge them for the costs of restitution... But that does not sit well with emotional involvement in the property.

Apart from "My dad used to own this flat", what's special about this particular flat?
Why is there emotional involvement in this particular flat?
Would your decisions about the residential letting business be different if it was a different flat?

The equity in the property is my "gift", subject to external factors, that's all I care to maintain until such time as I need to cash it in for other purposes, or to give to my children etc etc.

By George, I think he's got it!

If you were given the exact same amount of money as the equity, would your business decision be to buy THIS flat and choose to rent it?

Technoholic

Yes, I would buy this flat with my own money.

No, I won’t bend to your will because you and a thousand other people say I should. If I didn’t have a tenant in the property, I would probably just leave it empty and pay the mortgage myself, if that means it costs me money, fine, I’ve still got my equity and I’m gaining more. End of for me.

Yes, if you must know there is a reason for the emotional attachment to thanks property that is not something I need to discuss but the fact is that even if there wasn’t and my dad was gifting me a different house/flat/money/rocks/sand then I would still believe the same. Sorry if that sounds facetious but I’m trying to make my point.

Plus, the main point here is, does it really matter. All I asked for was advice on buying the property, the rest and reasons are up to me