Buying a house in sons name.

Pikeman1

Hi have some money to invest thinking about a pension or property. I already have a flat I rent out. My son who is 30 and lives with us and unlikely to ever leave. The inheritance will be his one day any away so thinking of buying the property in his name. Is this something that could be done. No mrtgage would be required. Not sure about transferring the money to him. Understand within 7 years I would be liable for capitol gains etc. Thank you

da_rule

There wouldn’t be any capital gains tax. The 7 year rules relates to inheritance tax.

You can’t just buy it in his name, he would have to sign the deed etc. You would be essentially gifting him the cash and he would use it to buy a property. Does your son want to own a property? What would he do with it? Would he just rather have the cash?

AnotherJoe

Unless you loan your son the money with a signed agreement and perhaps charge against the house "you" wont be buying it "in his name", he will.
Assuming its let out, who will manage it? Whats his tax position like?

Pikeman1

Yes I would be essentially gifting him the cash to buy in his name on the deeds. It's mainly for investment looking at auction property's to renovate. Then decide rent out or go the lodger route. He's a basic rate tax payer

AdrianC

Pikeman1 wrote: »

The inheritance will be his one day any away

Will it?

What if you or your wife need expensive and prolonged residential care?
What if you get involved in something that leaves you bankrupt?
What if you and he have some kind of falling-out so severe that you disown and disinherit him?
What if he simply predeceases you?


You simply cannot say "He'll inherit it one day". He will inherit whatever you choose to leave him of however much your estate is worth when you die. No more, no less, no earlier.

Of course, you can make him a gift of however much you want, whenever you want. But once that gift is made, it's his. End of.

Fund a flat purchase in his name? Sure. But it's his flat to then move into... or rent out... or sell... or turn into a brothel... or grow industrial quantities of dope in... or use as a flophouse for several dozen modern slaves... And you can't do a damn thing about it (well, short of shop him to the police for some of those latter options).

So, unless he actually wants the flat, just give him the money. Or don't. Your choice.

The last thing you should do is give him the flat and insist he then runs your choice of residential letting business, simply because you think it's worked for you. It's an abysmal idea, and almost guaranteed to breed resentment. Either he'll decide he doesn't want to, or you'll think he's doing it wrong, or if he gets a bad tenant it'll be your fault. Or, worse, a combo of all three.

LilElvis

And if he marries, then gets divorced, half the property will go to a stranger.

Why would a thirty year old still be living at home and why is he unlikely to ever leave? Unless he has a disability that really isn't normal or something that should be encouraged.

Pikeman1

Thanks for the comments all taken in. I suppose there could be complications. But many transfer money or assets to a spouse for tax reasons and then split up and loose out to some stranger. I may just decide to renovate and flip. Would that cause promblem with hmrc?

AnotherJoe

Pikeman1 wrote: »

Thanks for the comments all taken in. I suppose there could be complications. But many transfer money or assets to a spouse for tax reasons and then split up and loose out to some stranger. I may just decide to renovate and flip. Would that cause promblem with hmrc?

Not a problem, no. But tax to pay , yes of course.

G_M

renovate/flip = a business = Income Tax.

Not sure if you now mean in your own name or son's as per header...?

Pikeman1

If I did it in my name and sold after the works would I be liable for income tax or capitol gains tax? If I did it in my sons name I assume nothing to pay. Of course wouldn't be able to do this mutiple times. But many people move every couple of years. I understand the complications of having it in my sons name and the cosequeies if there's a change in circumstances.

G_M

Pikeman1 wrote: »

If I did it in my name and sold after the works would I be liable for income tax or capitol gains tax?

Income Tax



If I did it in my sons name I assume nothing to pay.

You can't.If you gift the money to your son, and he renovates/flips, that is nothing to do with you.
The amount you gift him would be subject to the Inheritance Tax 7 years rule.
Or you could loan him the money,

He would be liable for Income Tax on the renovation/flip of his property.

Of course wouldn't be able to do this mutiple times.

Why not?

But many people move every couple of years. I understand the complications of having it in my sons name and the cosequeies if there's a change in circumstances.

Your son would not be living there - you have made that clear. It's a business venture, not a home.