Gifted home and looking to buy for first time - stamp duty question

MrUdagawa

Newbie here so apologies if this has been asked before...
I'm applying for a mortgage with my partner. He is a first time buyer, however several years ago my mother transferred her home into my and my sister's name (a decision I now regret).
Does anyone know if I transferred my Mum's property fully to my sister's name if this would then qualify us for a lower stamp duty rate?

sammyjammy

I believe you'd be liable for capital gains tax on the half of the house?  How much would it be worth?


Does your mother still live in the house?

Keep_pedalling

Yes you will, but you will be loosing a massive asset to your sister, and any reduction in stamp duty is likely to be offset by a capital gains tax liability when you transfer it.

MWT

MrUdagawa said:

Does anyone know if I transferred my Mum's property fully to my sister's name if this would then qualify us for a lower stamp duty rate?

You would avoid the 2nd home element of the Stamp Duty if you no longer had any ownership of your mother's house, but you will not regain your first-time buyer status as far as stamp duty is concerned. 

MrUdagawa

sammyjammy said:

I believe you'd be liable for capital gains tax on the half of the house?  How much would it be worth?


Does your mother still live in the house?

yes she does 

silvercar

You would be transferring the half property to your sister. As you are connected parties it would be deemed to be at market rates, even if no money changed hands. So calculate the difference in value between your half when you received the share of the property and the value of it now. To see if there is a CGT liability. Remember that the value of a property with someone having the right to live in it rent free is not the same as the open market value. Arguably the value of half a share in a property is also not half the full value of the property.

MrUdagawa

Thank you. I think the open market value of the property would be worth around 90000

Keep_pedalling

MrUdagawa said:

sammyjammy said:

I believe you'd be liable for capital gains tax on the half of the house?  How much would it be worth?


Does your mother still live in the house?

yes she does 

In which case why not transfer your share back to your mother? She was foolish to do this in the first place so this would correct half the mistake. You mother could then amend her will to leave you a larger share than your sister.