Property Gifted, Re-Mortgage and Re-Pay?

getmore4less

Jackt90 said:

Keep_pedalling said:

Jackt90 said:

getmore4less said:

Its not a gift if there is money to be paid back its a purchase with a loan from parents

There will be consideration, SDLT will apply to the linked transactions.

Thanks. With that said, would IHT be avoided doing this, providing parents live more than 7 years? 

No , because it is a loan not a gift. Technically if the parents gifted the house and were later gifted a sum of money  back it could increase IHT as the parents gift would stay in their estate for 7 years and the gift to them would be added as well.

How long have the parents owned this house? Unless it was obtained very recently they are likely to have a capital gains liability if they gift it.

Hi Keep Pedalling, 

Only a few years, however through acquiring planning and increasing prices, it will have appreciated. 

I am just wondering what the best solutions may be? 


Thanks 

Woops, just created a capital gain

Should have sold to son before getting planning.

Thrugelmir

Jackt90 said:

A property that is gifted from parents to a son or daughter. The son or daughter then re-mortgages the unencumbered property and then re-pays (via bank transfer) to the parents, the amount of which they agreed the sale (in this case it would be under market value). 

The disposal as far as the HMRC is concerned is the market value. Irrespective of the consideration received. A loop hole that was blocked many many many moons ago. You'll need to be highly creative and knowledgable about the tax code to think of anything which hasn't been attempted before.