selling house to son process

cluelessoldf

Hello All,
sorry for the most mundane and probably obvious question. I own a house, with £2k left on the mortgage. I want to sell it to my son. we agreed that me, him and my ex are splitting it three ways. He had it valued at £130k, so £43k each. He has lived in it his whole life, its only my name on the deeds

so I sell it to him for £86k, and he uses his part as part of deposit. 

House valuation part is done. He will need to get mortgage. can anyone tell me what exact process is to do next? I have googled and it says " find solicitor " but what are steps after that and is there anything I can save money on in the process, as I trust him with my life and he trusts me. 

Keep_pedalling

Was this also your own residence for all of the time you owned it? If not you may have a CGT liability to deal with.

cluelessoldf

Keep_pedalling said:

Was this also your own residence for all of the time you owned it? If not you may have a CGT liability to deal with.

Yes it was, the only home I owned. I have been staying at my girlfriends for past few years, he has lived there all his life

user1977

It's basically the same process as any other house sale, though you don't need a contract and he won't need much of the usual due diligence carried out given he knows the property. Given you've still got a mortgage, I'd generally say you'd need a solicitor too. If you can get rid of that by paying off the £2k now, that might simplify matters - though may also complicate them as we've had other people have problems where the mortgage is still in the process of being removed at the time of a sale.

theartfullodger

Assuming you haven't lived in it all the time there will be CGT to pay, ultimately HMRC can decide to tax you on what they think is market value, not what paperwork says.  Declared and paid within , 60 days of sale (!)

You should at the least get say 3 valuations of the place.  I'd never sell on the basis of the purchaser's valuation, for obvious reasons, and doubt HMRC would accept his sole figure.

When I did maths £130 divided by 3 wasn't £43.

What evidence do you have for son and ex having a beneficial interest in the place?  Paperwork?

Has any rent been being paid for his or anyone else's occupation?  Who has been declaring it to HMRC? (Might help with beneficial interest)

Artful, 74 yr old oldf, often assessed as clueless

cluelessoldf

theartfullodger said:

Assuming you haven't lived in it all the time there will be CGT to pay, ultimately HMRC can decide to tax you on what they think is market value, not what paperwork says.  Declared and paid within , 60 days of sale (!)

You should at the least get day 3 valuations of the place.  I'd never sell on the basis of the purchaser's valuation, for obvious reasons, and doubt HMRC would accept that figure.

When I did maths £130 divided by 3 wasn't £43.

What evidence do you have for son and ex having a beneficial interest in the place?  Paperwork?

Has any rent been being paid for his or anyone else's occupation?

Artful, 74 yr old oldf

He has had 3 valuations done, all saying the same.. around 130-140. zopa, strike and some local estate agent. 

Legally, my son and ex have no legal obligation to any of this house. It is split 3 ways because they helped me out monetary wise when things weren't going so well some years back, and when I lived with my ex she contributed to bills etc so it's split 3 ways, because I want to

no rent being paid since I moved out, he does pay all the bills though. 

No CGT to pay as I have been living with a new partner, we don't own that house and its not my secondary legal residence. I own one house and always have 

cluelessoldf

user1977 said:

It's basically the same process as any other house sale, though you don't need a contract and he won't need much of the usual due diligence carried out given he knows the property. Given you've still got a mortgage, I'd generally say you'd need a solicitor too. If you can get rid of that by paying off the £2k now, that might simplify matters - though may also complicate them as we've had other people have problems where the mortgage is still in the process of being removed at the time of a sale.

I have never gone through the process of a house buy or sale, this house was bought right to buy in 2001 or so for around £12k

user1977

cluelessoldf said:

theartfullodger said:

Assuming you haven't lived in it all the time there will be CGT to pay, ultimately HMRC can decide to tax you on what they think is market value, not what paperwork says.  Declared and paid within , 60 days of sale (!)

You should at the least get day 3 valuations of the place.  I'd never sell on the basis of the purchaser's valuation, for obvious reasons, and doubt HMRC would accept that figure.

When I did maths £130 divided by 3 wasn't £43.

What evidence do you have for son and ex having a beneficial interest in the place?  Paperwork?

Has any rent been being paid for his or anyone else's occupation?

Artful, 74 yr old oldf

No CGT to pay as I have been living with a new partner, we don't own that house and its not my secondary legal residence. I own one house and always have 

That's not how CGT works. The exemption is only for your principal residence, you have a potential CGT liability for any other property, even if it's the only one you own.

Robin9

You will need a solicitor to protect the mortgage company's interest in the property.  Are you in a position to clear the outstanding £2k  prior to sale ?   

cluelessoldf

Robin9 said:

You will need a solicitor to protect the mortgage company's interest in the property.  Are you in a position to clear the outstanding £2k  prior to sale ?   

not really, I thought it could be removed after it's sold but maybe that's me being naïve

if it helps the process a lot then it's something I can really look into

saajan_12

cluelessoldf said:

Hello All,
sorry for the most mundane and probably obvious question. I own a house, with £2k left on the mortgage. I want to sell it to my son. we agreed that me, him and my ex are splitting it three ways. He had it valued at £130k, so £43k each. He has lived in it his whole life, its only my name on the deeds - between you and the ex, its probably easiest to just deal with that after the sale. For son's share, that can either be treated as a vendor gifted deposit, or repayment of an existing loan. Son should speak to a broker, to find a lender that will allow whichever arrangement. Even if the broker charges a small fee eg £250, if they can find son a better interest rate or avoid a failed application, that could save money long term. 

so I sell it to him for £86k, and he uses his part as part of deposit. 

House valuation part is done. - do you mean by a surveyor or estate agent? The lender will likely want to do their own, by their valuer / surveyor. 
He will need to get mortgage. can anyone tell me what exact process is to do next? I have googled and it says " find solicitor " but what are steps after that and is there anything I can save money on in the process, as I trust him with my life and he trusts me. - since he needs a mortgage, you'll have all the usual checks and not much you can really skip. Next steps are you each get a conveyancer. 

In line.