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HELP! Inherited buy-to-let gifted to my children?

Rex200
Posts: 1 Newbie
I hope someone can point me in the right direction?
A few months ago my father passed away leaving a buy-to-let property to his 4 children, who I am one. The property still has tenants whose rent produces £1300 per month after agents fees.
Due to my fathers estate being below the threshold the property is not subject to inheritance tax.
I'm wondering if I can buy the property outright from my siblings and then immediately gift it to my own children who are aged 11 and 13, either directly or via a trust.
My question is regarding the ongoing rental income in this scenario. Since both my children have a £12,500 tax free allowance as they have no income, could they receive the rental income effectively tax free?
Many thanks for you help with this, I would like my children to have full control of this property when the youngest reaches 18 and so I don't want to make a mistake and have the property sold off unnecessarily.
A few months ago my father passed away leaving a buy-to-let property to his 4 children, who I am one. The property still has tenants whose rent produces £1300 per month after agents fees.
Due to my fathers estate being below the threshold the property is not subject to inheritance tax.
I'm wondering if I can buy the property outright from my siblings and then immediately gift it to my own children who are aged 11 and 13, either directly or via a trust.
My question is regarding the ongoing rental income in this scenario. Since both my children have a £12,500 tax free allowance as they have no income, could they receive the rental income effectively tax free?
Many thanks for you help with this, I would like my children to have full control of this property when the youngest reaches 18 and so I don't want to make a mistake and have the property sold off unnecessarily.
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Comments
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It seems like a bad idea for many reasons...Do your siblings even want to sell to you?Children are not old enough to own themselves and trusts are complex and costly to administer.You will be depriving them of any FTB entitlement as and when they do wish to buy a property.You will be subjecting them to 5% additional SDLT or whatever it is by the time they wish to buy their own.You have no idea if they have any wish to be Landlords, especially as young as 18.What is the real issue here? Presumably it cant be a sentimental attachement to the property if it is a tenanted BTL. There are far more straightforward and flexible investments for yourself or the Children if it is simply an investment opportunity.4
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Have to agree this is a terrible idea for all the reasons given above. In addition do you really fancy running a trust as well as being a landlord.4
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Once you start looking into what is involved in running a Trust, you will think that being a landlord is simple!The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0
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Argh what a mess to leave you and your tenants in. The tenants now have four landlords; who is going to be paid the rent and who is going to effect repairs? What happens if two people want to improve the property/ increase the rent/ do repairs and the other two don't want to? I'm assuming the house is owned outright and not mortgaged.
Yes you can buy out your siblings and become the only landlord, better for both you and the tenants.
At that point I would simply remain the landlord, pay whatever tax is due on the rent and put the rest into a high interest account for your children until they are both old enough to decide if they want to be landlords or not ( and enter into the same problem of them not being one landlord for the tenant to deal with)
Simplest thing to do would be to sell the property with tenant in situ and split the proceeds and save yourself a HUGE amount of hassle3
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