Easiest way to transfer name of house - no mortgage!

Campfire123

I bought a house a few years ago but the house is on my uncle’s name as at the time I couldn’t get a mortgage on my name. However I have been paying all the payments and the mortgage is now fully paid off and is still in my uncle’s name. I would like to transfer the house into my name, something I thought would be a simple process, but turns out it’s not. 

It’s my uncle’s second home, so I understand that even if he were to “gift” it to me, capital gains tax would be applicable as the house value has increased by around £40,000. 28% of this amount is too much for me to afford. 

My other idea was for my uncle to “sell” the house to me for the same price I paid for it, so a solicitor would do the paperwork for us but there would not actually be any money transaction involved - would that be ok? 

Is there any other way I can transfer the house to my name without incurring any major taxes? 

Thank you 

user2019

I can be pretty certain 11k cost (capital gains) is going to be your cheapest way of actually doing this in reality. Very interested to hear what others say about this.

You could buy if off him with a new mortgage and he could gift you back the money to pay it off quickly but you could be liable for some IHT if he doesn't live for more than 7 years, and you'd still need a mortgage deposit of more than 11k in cash + then pay the interest, arrangement fees etc, plus SDLT on top!

TripleH

Can you show you have made the mortgage payments and not your uncle? Are you on the house deeds at all?

You would need to pay any stamp duty on transfer of ownership at market value.

When the house was bought, did the paperwork state that you would be paying the mortgage?

The issues that spring to mind are should your uncle need care, the transaction might be unpicked and ruled as deprivation of assets or that your uncle has not declared tax on rental income as HMRC would only count the interest as an allowable expense but I might be overthinking this.

Campfire123

Thank you for your response. I definitely don’t want to go down another mortgage route. 

Could I buy the house off him but not actually give any money? So just new deeds and contract, but no transaction? 

user1977

If all the funds have actually come from the OP, isn't there an argument that they've always been the beneficial owner (and that rules out CGT liability for the uncle)? I assume this is the OP's main residence we're talking about too.

And in which case, why would the OP be paying anything to the uncle merely to transfer the registered title?

Campfire123

Yes it it my main residence.
Okay so if I am the beneficial owner of the property (say I get the paperwork done for that), how can I go from being the beneficiary owner to the legal owner? What would the process be? 

Campfire123

In response to Triple H:

I can show/prove that I have made 2/3 of the payments. I’m not on the deeds at all didn’t think about this at the time. 

No the paperwork did not state that I would be paying the mortgage. But I have bank statements to prove. 

Thanks for your comment. I will look into the final paragraph more 

Alderbank

Your uncle can claim £12,300 CGT personal exemption. This is on the total of all CGT claims for the year however.

I assume he bought the house with vacant possession and is thinking of selling also with vacant possession?
The house is fully paid for, if your uncle decides to let the property before selling, the presence of a sitting tenant could reduce valuation by a substantial amount, 20% or possibly more. This would be the case even if the tenant was his nephew or another family member. 

jj_43

I think you have summed up the situation quite well. Your uncle has ownership of the property. Hopefully you had a written agreement detailing the payments are your contribution to the mortgage. No there no way around what your doing to reduce taxes. As you say your uncle will have to gift the property to you at market value.

newsgroupmonkey_

jj_43 said:

I think you have summed up the situation quite well. Your uncle has ownership of the property. Hopefully you had a written agreement detailing the payments are your contribution to the mortgage. No there no way around what your doing to reduce taxes. As you say your uncle will have to gift the property to you at market value.

And as above, market value with a sitting tenant is significantly less.

lincroft1710

So were you paying the mortgage directly to the lender or via your uncle?