Buying a house in sons name.

kinger101

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? 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.

Buying a property with the intention of reselling it is trading. It therefore falls within income tax. Even if you do it once. Not sure why you assume there's no tax to pay if it's in your son's name.

It sounds like some half-baked attempt at tax avoidance rather than a desire to pass on assets to your son.

Pikeman1

I did expect those replies as soon as I wrote it lol. Tax avoidence is legal as far as I'm aware. But may be I should have a rethink. Thanks for the comments may be not such a good idea. May be marcus at 1.5 percent would be much easier lol

gary83

In addition to everyone else’s points He’d also lose his first time buyer status, so if he were to buy a house or flat at any point in the future rather than paying no stamp duty he’d have to pay the extra second home stamp duty at that point, he’d also not be eligible for any first time buyers government free money in the form of a Help to Buy ISA or LISA bonus.

I’d recommend having a rethink, there’s a lot of cons to your scheme, I can’t see enough pros to balance it out.

Pikeman1

Many thanks there would be no mortgage so don't think he'd qualify for the help to buy scheme. But you're right sounds good in my head but listening to the comments perhaps not so.

gary83

I wasn’t thinking about any help to buy scheme for this purchase, My point was although you say your 30 year old son is unlikely to ever leave your family home, unless there’s a fairly good reason stopping him you can’t predict the future. if he were to look at buying a house by himself he could miss out on potentially thousands of pounds worth of free cash from the government with no strings attached in the form of a LISA or HTB ISA bonus, he’d also get stung with the second home extra stamp duty bill rather than the no stamp duty that he’d expect to pay as a genuine first time buyer. In addition to all the other flaws in your plan if he were to buy a property at any point in the future your scheme to avoid paying tax now could end up costing him far more in the long run.

Pikeman1

Thanks for the reply. Don't really want to go into detail about my son but does have slight autism but you wouldn't notice if you saw him. He works with me don't think he'd work anywhere else. He just can't mix with people. Hence ultimately it would be for him. I have another son who fully understands. Will be making a will so the property's ate shared fairly. I h ave a flat I rent out at the moment. Writing this it's sounds even more complicated lol.

kinger101

Pikeman1 wrote: »

Tax avoidence is legal as far as I'm aware.

Insofar as the people avoiding tax have taken care to make sure they're complying with the legislation. As best what you're doing is negligent, at worst criminal.

Speak to an accountant and get this sorted properly.

Pikeman1

Why do you assume I'm doing a negligent or even criminal act. Get what sorted properly? have asked a question on a open forum haven't even put an offer in on any property. I will be talking to my accountant if I decide to go ahead. All legislation will be in place for tax purposes. Don't mind criticism that's why I posted..but don't assume Im negligent or a criminal before I've even done the crime. Crikey glad you ain't a judge or perhaps you are lol.

00ec25

Pikeman1 wrote: »

Why do you assume I'm doing a negligent or even criminal act. Get what sorted properly? have asked a question on a open forum haven't even put an offer in on any property. I will be talking to my accountant if I decide to go ahead. All legislation will be in place for tax purposes. Don't mind criticism that's why I posted..but don't assume Im negligent or a criminal before I've even done the crime. Crikey glad you ain't a judge or perhaps you are lol.

then think about your use of wording and more importantly the impression it creates since on an open forum that is the only thing we have to go on

Pikeman1 wrote: »

I did expect those replies as soon as I wrote it lol. Tax avoidence is legal as far as I'm aware.

provocative wording with a clear implication that you think you know your are correct.

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? 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.

you were incorrect in the context of what you wrote, your proposal to take the money "in your son's name" would not be avoidance, it would be evasion. Posters pulled you up for that.

The proposed works are subject to income tax, not CGT.

if you want to do it "in" your son's name, but he lacks mental capacity to do so himself, then do it via a trust for his benefit. Just make sure the money goes to him, not, as implied by your words, you intend that the money comes back to you.

Pikeman1

Some of the funds are already in my sons name. Any profits or tax to pay will also be in my sons name. So money's will go to him. If I do ahead will get some advice on a trust fund. If I put 20000 into an isa in his name would you class that as tax evasion? Genuine question if so a lot of tax evasion goes on.