How do I give my son money?

00ec25

pulliptears wrote: »

Yes, we're selling within 3 years of the purchase of the new property.

no, you are out of touch. CGT exemption applies for 18 months after it ceased to be the property you physically lived in, not 3 years. The rule changed long ago

that said, I doubt you would have any CGT to pay anyway by the time the gain is split between you and your wife (assuming you jointly owned it) and you each claim your CGT allowance.
CGT would be based on the market value less original cost, not what son pays you

pulliptears

Thanks all.

Firstly, I'm female.

To answer a few questions. Mum died in 2017. We bought property B in August 2018 for £240,000. There is a mortgage of about £180,00 on that Property A is Mortgage free and has a sale price of £115, 000. Of that we want son to pay £100,000 gifting the £15,000 made up of £12,000 from Mum and £3,000 from husband and I.

sheramber

Read the link above

You pay CGT on any taxable gain you made between costs of buying property A and selling it.

Property B is not relevant.

Mojisola

pulliptears wrote: »

My late Mum wished that my children have £12k from the sale of her estate each to use as a house deposit. She thought her will reflected this but when she died it transpired they recorded her wishes wrongly and I inherited everything.

pulliptears wrote: »

Of that we want son to pay £100,000 gifting the £15,000 made up of £12,000 from Mum and £3,000 from husband and I.

As you inherited everyone from your Mum's will, you and your husband are giving your son £15,000.

pulliptears

Mojisola wrote: »

As you inherited everyone from your Mum's will, you and your husband are giving your son £15,000.

I think you know what I mean.

getmore4less

pulliptears wrote: »

Thanks all.
...
Mum died in 2017.
...

if it was relevant you only get 2 years to do DOV depending when in 2017 you may be too late to make the £12k gift from mum.

If your estates won't attract IHT then there is no point in one anyway.

When she died I paid off the remaining mortgage on Property A. With the remainder I bought property B and moved out, leaving my son in property A with his fiancee.

When did you buy property A. and for how much?

A quick estimate of CGT liability can be made based on the time owned/lived in and owned not lived in.

...........

we want son to pay £100,000 gifting the £15,000 made up of £12,000 from Mum and £3,000 from husband and I.

Do you need the £100k now, you could just lend it to him and transfer the house.
He then pays you back monthly(no interest to keep it simple) no need for a mortgage.

If you want to use the money to pay down your other mortgage you can build in the interest by making the debt bigger and reducing the gift element.

(usual caveat that money and family don't mix)

pulliptears

getmore4less wrote: »

if it was relevant you only get 2 years to do DOV depending when in 2017 you may be too late to make the £12k gift from mum.

If your estates won't attract IHT then there is no point in one anyway.

Mum died January 17. The will alluded to her gift, but then went on to say it was only if I wasn't surviving. What it should have said was on the sale of the property a 25% share was to be split between my 2 children. Sadly that bit got lost in translation.

I realise the money is mine in name, but I've never felt it was. I know Mums intention so whilst I appreciate I'm muddying the waters somewhat to me that money is still Mums, I'm just now distributing it as she wanted me to.

When did you buy property A. and for how much?

A quick estimate of CGT liability can be made based on the time owned/lived in and owned not lived in.

Oh gosh, 1995 I think for £36k.

Do you need the £100k now, you could just lend it to him and transfer the house.
He then pays you back monthly(no interest to keep it simple) no need for a mortgage.

If you want to use the money to pay down your other mortgage you can build in the interest by making the debt bigger and reducing the gift element.

(usual caveat that money and family don't mix)

I need to pay off a chunk of the mortgage on property B. Plus I have daughter who I also now owe £12k too so plan to give her that in stages to put into a LISA. She isn't planning on buying for about 5 years so that should work well for her.

I'll mention this to DH though, thanks!

Mojisola

pulliptears wrote: »

I think you know what I mean.

I know you think of it as your Mum's money but it's a gift from you in fact and that's how it will have to be accounted for.

p00hsticks

pulliptears wrote: »

Oh gosh, 1995 I think for £36k.

So property A was bought in 1995 for £36k and is being sold for £115k.

Who has owned it and who has lived in it,and between what dates ?


If the person who owned it hasn;t been living in it there's pontentially a capital gains tax liability there....

pulliptears

p00hsticks wrote: »

So property A was bought in 1995 for £36k and is being sold for £115k.

Who has owned it and who has lived in it,and between what dates ?


If the person who owned it hasn;t been living in it there's pontentially a capital gains tax liability there....

Owned by my husband and I and has been the family home from 95 until August last year so should be fine on that score.