Adding Someone To Property Title Deed

SongBird50

What are the stamp duty and/or inheritance tax implications of adding someone to the title deed of a house in a co ownership? There is no mortgage on the house and it is entirely owned by one person at present. Would there be a big difference in costs/tax, depending on whether the arrangement was a joint tenancy or a tenancy in common? I’m assuming a solicitor would be able to explain but hoping to be able to go armed with a bit more knowledge about it first.

K_S

@songbird50 If there's no mortgage being taken out on the house and no cash (or some other assets) changing hands then there shouldn't be any SDLT implications of a transfer of equity. 

If there is, then if the total consideration (cash changing hands or mortgage debt being newly assumed by the person receiving the equity) exceeds the stamp duty threshold, then stamp duty is payable at the prevailing rate.

Not sure about whether or not it makes a difference if it's joint ownership or tenants in common. Hopefully @SDLT_Geek will spot this.

SDLT_Geek

K_S said:

@songbird50 If there's no mortgage being taken out on the house and no cash (or some other assets) changing hands then there shouldn't be any SDLT implications of a transfer of equity. 

If there is, then if the total consideration (cash changing hands or mortgage debt being newly assumed by the person receiving the equity) exceeds the stamp duty threshold, then stamp duty is payable at the prevailing rate.

Not sure about whether or not it makes a difference if it's joint ownership or tenants in common. Hopefully @SDLT_Geek will spot this.

For a pure gift with no mortgage involved there should be no SDLT and it would not make a difference whether the ownership is as joint tenants or as tenants in common.

diystarter7

SDLT_Geek said:

K_S said:

@songbird50 If there's no mortgage being taken out on the house and no cash (or some other assets) changing hands then there shouldn't be any SDLT implications of a transfer of equity. 

If there is, then if the total consideration (cash changing hands or mortgage debt being newly assumed by the person receiving the equity) exceeds the stamp duty threshold, then stamp duty is payable at the prevailing rate.

Not sure about whether or not it makes a difference if it's joint ownership or tenants in common. Hopefully @SDLT_Geek will spot this.

For a pure gift with no mortgage involved there should be no SDLT and it would not make a difference whether the ownership is as joint tenants or as tenants in common.

No stamp as you rightly said.

However, using the gift route, especially if the hare is worth a fair bit EG, 100/200k etc, would CGT not kick in when/if sold?

I gifted a property, t was over the stamp rate, completed papers ourselves and used a solicitor for the signatures/verifications cost 40 quid a person x 3 and that was it.

getmore4less

Missing information starting with, 

Has the person that currently owns it always lived there? If not provide the info.
Once transferred will they both live there?. if not info needed

Is it a gift or for consideration? info needed
Marriage/civil partner status? plans?
Any kids joint or otherwise?


The base starting point is an outright gift with no consideration current owner always lived there and both will live there after 

Disposal, no CGT(always lived there)
Gift, no consideration no SDLT
Both living there no future CGT

Potentially IHT neutral but depends on the answers.

the answers can also swing JT or TIC as best choice 

SongBird50

getmore4less said:

Missing information starting with, 

Has the person that currently owns it always lived there? If not provide the info.
Once transferred will they both live there?. if not info needed

Is it a gift or for consideration? info needed
Marriage/civil partner status? plans?
Any kids joint or otherwise?


The base starting point is an outright gift with no consideration current owner always lived there and both will live there after 

Disposal, no CGT(always lived there)
Gift, no consideration no SDLT
Both living there no future CGT

Potentially IHT neutral but depends on the answers.

the answers can also swing JT or TIC as best choice 

The person living there is single elderly woman with no children or other living relatives who has always lived there. There is no mortgage. The person seeking joint tenancy is the granddaughter of an old friend who normally lives abroad but has recently been to stay. She has brought in a lawyer and either made herself a joint tenant, or has changed the lady’s will to that end. This person has left the country for a couple of weeks and it has become clear that the elderly owner of the house is confused about what has taken place. 

getmore4less

That changes everything, would have been useful in the first post.

The fist thing is to work out is what has happened.

As she is confused then someone needs to step in and review any documents.

Does anyone have POA for this person if not something they should be considering. 
Do they have capacity.

Has she had totally independent advice.

user1977

getmore4less said:

That changes everything, would have been useful in the first post.

Seconded!

As above, there's not much point trying to figure out the implications if we don't know what (if anything) has actually happened.

I'd hope that a lawyer (does she even know whether it was a lawyer?) would be wary about being dragged in by a third party (not even a relative?) and carrying out work on behalf of somebody who seems confused about what's going on.