Joint Tennant property signed over to one party, will it trigger cgt or stamp duty

Markp1984

Hello, I own a small property with my mum. There's no mortgage. We let it out, on purchase we paid the extra stamp duty at time of purchase for this.

However my mum is now in a position where she'd kindly like to pass her half of the property to me. There's the costs of changing this to put the property in just my own name instead of the two of us, however would any of the taxes, stamp duty, or capital gains be triggered by the change from me being half owner in a joint Tennant situation to full sole owner.

Thanks so much for any information. 

Keep_pedalling

No stamp duty but it is likely to leave you mother with a CGT liability. 

Markp1984

Keep_pedalling said:

No stamp duty but it is likely to leave you mother with a CGT liability. 

Thank you, appreciate it. Is that even if no money changes hands? 

Keep_pedalling

Markp1984 said:

Keep_pedalling said:

No stamp duty but it is likely to leave you mother with a CGT liability. 

Thank you, appreciate it. Is that even if no money changes hands? 

Yes, because you are connected persons the transfer is deemed to be at market value. 

saajan_12

Stamp duty - based on the price paid which is £0 here since no money is changing hands and no mortgage is being transferred -> NO

CGT - based on the market value at the point of transfer, which is 1/2 x the value. If it was an arms length transfer then the assumption is the amount paid is the value, but for a gift from a related person, its based on the market value. -> YES

Markp1984

Thanks for all the help &. Resolving my query. much appreciated! 

Brie

I think there may be inheritance tax to pay assuming your mom has that much in assets to pay it at all, because this would be considered a gift and would have to be included in her estate if she were to die in the 7 years following her gifting you her half.  

On the other end of the asset scale, if she has very little in assets and eventually needs local authority help to pay for any care costs (at home or in a care home) the value of her gift would be included because otherwise she would be guilty of "deprivation of assets".  This might mean that the cost of her care would be expected to be paid by you since you have "her" asset or a lien would be put on the property so the LA can recoup costs at some future point when it is sold.  As far as I'm aware there is no time limit on this but if the situation didn't come up for 30 years they might not look back all that time.  

Keep_pedalling

Brie said:

I think there may be inheritance tax to pay assuming your mom has that much in assets to pay it at all, because this would be considered a gift and would have to be included in her estate if she were to die in the 7 years following her gifting you her half.  

That would be payable if the gift was not made, although gifting and not surviving 7 years could result in CGT plus  IHT rather than just IHT.