Gifting half of property to son

motorman99

Hi all thanks in advance for any help
my wife owns an unencumbered property that is rented out, current value about 500k
With my blessing she is leaving this to her son in her will. 

I’ve advised her to gift him half of it now and hope she lives another seven years, otherwise there will be lots of inheritance tax to pay. 

Is this just a simple declaration of trust or similar done b6 solicitor?can we/ she DIY? 

Do the land registry need to be informed?

Thank you 

Bob 

Brie

First questions - does he want it?  Can he afford it??  Not all gifts are welcome.

I may be wrong but won't there by stamp duty to pay by someone?

I would have thought a solicitor would need to be involved but may be wrong likewise I thought ownership had to be legally registered.  Happy to be corrected on these.

user1977

No stamp duty if it’s a gift, no need for solicitor if you know what you’re doing.

sheramber

If there is no mortgage  there will no be Stamp Duty to pay but your wife may have to pay CGT on the market value of the share gifted.

Does your son want to  become a landlord?

Does he want to have to complete a tax return and pay income tax on rental income?

If he has not already bought a house he will lose his first time buyer status.

Keep_pedalling

Several flaws in this plan, the first is that your wife will almost certainly face a CGT liability on the transfer and if she is still going to be receiving 100% of the rental income then this will be classed as a gift with reservation of benefit and will not fall out of her estate under the 7 year rule. If this is not a GWROB then their is a risk that she could die within 7 years resulting in a CGT + IHT double hit,

If her son does not already own his own home then this will lose him his first time buyer status and will cost him an additional 5% in SDLT when he does purchase his own place. 

jonnydeppiwish!

And don’t forget deprivation of assets - there’s no time limit for this is iirc.

Keep_pedalling

jonnydeppiwish! said:

And don’t forget deprivation of assets - there’s no time limit for this is iirc.

I don’t think that is an issue with the value of assets we are talking about here.

jonnydeppiwish!

Keep_pedalling said:

jonnydeppiwish! said:

And don’t forget deprivation of assets - there’s no time limit for this is iirc.

I don’t think that is an issue with the value of assets we are talking about here.

True but it does still need to be considered especially if it isn’t a residence of the partner.  They may own their residence outright but this asset would be taken in to account for care fees if needed.

Emily_Joy

https://forums.moneysavingexpert.com/discussion/6558918/my-brother-wants-to-sell-his-share-in-our-parents-home/p1

I would suggest reading this. At the end it appears my OH and I have no choice but to buy my brother out - if we want my parents to enjoy their home.