Transferring Ownership from Son to Mum

00ec25

Darkwolf wrote: »

I just feel that all the so called professionals ( Solicitors and Accountants ) will only give me advice that means they get a pay day

be fair. The only thing they do is sell knowledge, so why would you expect them to do that for free? Did you work for no pay? Obviously not, given the size of your pay-off...


if you go down the DoT route between son and mother you will need to account for the CGT in the same proportion since the DoT establishes a beneficial ownership (a right to the money from, not the legal ownership of, the asset) which is what CGT is based on.

the split of rental income is also based on the DoT so if you ever need to change it you will need a fresh DoT

bear in mind, there is no "we" in tax, either the DoT is between father, mother and son, or it is between mother and son, with father having no entitlement whatsoever.

xylophone

So called professionals?

If you have consulted a professional accountant and solicitor then they have studied long and hard ( and paid handsomely for the privilege) - surely you would expect them to charge fees commensurate with their expertise and experience?

Darkwolf

Sorry .. I do understand everybody as got making a living and I do appreciate that they have worked hard to get their qualifications. I am just trying to make sure that the route I chose is the correct one so that I am not paying unnecessary costs. The Solicitor and spoke to and who sent me a quote to Buy the property did not provide any alternatives other that to execute buying the property. That's why I feel that asking them for direction is not going to provide me with the right advice.

In regards to CGT if my Son sells the property in few years, would the CGT be based on the price they bought it for in the 1st place e.g £83,000 ?. So with CGT allowance that would me they could sell it at £83K plus the yearly allowance ?

I am also unsure how the Tax works on the Rent from the property. I have been on the Government site and maybe I'm a little daft but I'm still confused. Is the tax based purely on the income from the property with its own allowance or is it linked to your personal allowance e.g Tax paid on income such as PAYE.

You can see why I'm confused with it all. This is all new to me and is becoming a very steep learning curve.

00ec25

Darkwolf wrote: »

In regards to CGT if my Son sells the property in few years, would the CGT be based on the price they bought it for in the 1st place e.g £83,000 ?. So with CGT allowance that would me they could sell it at £83K plus the yearly allowance ?

the gain is the difference between original price paid and the the price it sells for

Darkwolf wrote: »

I am also unsure how the Tax works on the Rent from the property. I have been on the Government site and maybe I'm a little daft but I'm still confused. Is the tax based purely on the income from the property with its own allowance or is it linked to your personal allowance e.g Tax paid on income such as PAYE.

you are taxed on the profits from the rental income less costs

Darkwolf wrote: »

You can see why I'm confused with it all. This is all new to me and is becoming a very steep learning curve.

i appreciate it is a learning curve, but please understand you are asking about basic facts (not explaining matters of interpretation) which can be found by you doing your own reading instead of asking us to write out the UK tax manual

CGT basics
https://www.gov.uk/capital-gains-tax

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet

cgt advanced
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64200c

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9900

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg11730

rental profits basics
http://www.hmrc.gov.uk/courses/syob3/new_letting/HTML/new_letting_menu.html

rental profits advanced
https://www.gov.uk/hmrc-internal-manuals/property-income-manual

hazyjo

Personally...

I would sell. I think it's all being way over-complicated and convoluted. Yes, they will both be in debt. Let the ex worry about hers. You either lend him what he owes, or a bank, and he lives with you until it's paid off. Yes, it's a lot of dosh to effectively throw away.

Forget any money 'gifted'. It was exactly that. A gift. You have not 'invested in' anything.

I know it's hard, and I know you want to sort all this out for him, but I do think this is one he needs to learn from. I've split with 3 people when owned property with them. I've sold and downsized. Not once would I have let my mum get involved with any of it, nor wanted her to buy me out.

Not trying to be harsh. It just seems like a far simpler solution to me! And what 'usually' happens in these (very common) scenarios.

SmashedAvacado

There is a legal solution to this involving keeping the property now - you could get an option agreement over the property allowing you to buy it at any time for an agreed price now - this can be registered on the legal title at the land registry and will ensure that if you continue to put money into the property, the sellers are bound to sell. This wont bind the lenders, but will ensure that you can agree the price now, but not get tripped up on SDLT and the redemption. It will probably cost about £1k in legal fees.

xylophone

I wonder would it be possible for your son's girlfriend to be released from the mortgage (so that it and the property are in in your son's sole name), against your guarantee to the mortgagee that you will pay if he defaults?

He could return to the property and rent a room over the next four years to help cover his costs- he could then sell his PPR to you if he wishes.