Declaration of trust v transfer of equity?

happymum37

Hello

Advice please for my friend. Deffo not me I dont have this level of money.

She owns a house she inherited years ago off her grandma. Its mortgage free in her name. Shes wanting to sell and has a buyer all ready. She has never put her husband's name on the property and has been advised to before selling to help reduce tax.

Would a declaration of trust be as effective as transfer of equity? Ideally the buyers want a quicker sale but she doesnt want to risk paying more than she has too

Sam_666

Absolutely irrelevant if question is for friend or foe.

However, this will require specialist legal advice, as such trust must be registered with hmrc.
Both options will require time & money.
Adding partner will not reduce inheritance tax bill, who provided such advice?
Will all inheritance allowance be used up?

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82029465#Comment_82029465

No one mentioned inheritance tax - not clear from the post but I'd imagine this is a CGT issue...

Tiglet2

https://forums.moneysavingexpert.com/discussion/6671876/declaration-of-trust-v-transfer-of-equity

Did your friend ever live in the property?

They will have to calculate the value of the property when inherited (or your friend no longer lived in) and the value of the property upon sale. If the property is worth more upon sale than it was when inherited/last live in by friend, then Capital Gains Tax would be due on the taxable gain/profit. I am not an expert but believe the CGT free allowance is £3000 per person. So, any profit above £3000 per person would be subject to CGT upon sale. If your friend and her husband were both owners, they can claim the CGT allowance of £3000 each, before CGT is due on the remainder.

I can't see that a Declaration of Trust would help here as that is usually set up when two people own a property as Tenants in Common in unequal shares (i.e. 60% to your friend, 40% to husband).

Not an expert though, so someone else may come along to explain it better.