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  • FIRST POST
    • scsar88
    • By scsar88 8th Feb 18, 6:02 PM
    • 11Posts
    • 1Thanks
    scsar88
    Gifting my share of a property
    • #1
    • 8th Feb 18, 6:02 PM
    Gifting my share of a property 8th Feb 18 at 6:02 PM
    Hi All,

    I joint own my current house with my mum(Who also lives in the house) and am in the process of buying an off plan property which will be ready early 2019. I will be moving to this new property and it will be my primary residence.

    In the summer i will start looking for a mortgage for this new property but between then i would like to Gift my 50% of my current home either to mum or my brother for them to take on the remaining mortgage (approx 80k left on mortgage, house value 500k)

    My question is, is there a stamp duty cost on the free transfer of equity to either my mum or my brother?

    I have been told there would not be if i transfer it to my mum as she is already on the deeds where as there would be if i transfer it to my brother.

    Its all very unclear and any guidance would be a huge help

    Cheers
Page 1
    • 00ec25
    • By 00ec25 8th Feb 18, 7:57 PM
    • 6,379 Posts
    • 5,888 Thanks
    00ec25
    • #2
    • 8th Feb 18, 7:57 PM
    • #2
    • 8th Feb 18, 7:57 PM
    you don't fully understand the implications of your plan...

    1. there is an existing mortgage on the property

    2. the mortgage will not be cleared, therefore any change in ownership, including your gift, will need agreement from your current lender as your mother would become solely liable for the mortgage and thus may not be able to cover it in which case the lender will refuse permission for the gift.

    3. mother and you are currently named on the mortgage which has 80k o/s on it. In tax terms therefore you are each liable for 40k of mortgage. If you gift your 50% to mother there will be no SDLT payable as that 40k is well below the SDLT threshold (a gift of a mortgaged property represents an exchange of chargeable consideration which is the technical value that SDLT is based on) because mother gains a property and you get removed from the mortgage liability so you gain in return. Hence consideration given and received = SDLT liability , but below the threshold in this case so nothing to pay

    4. you cannot "give" your share of a mortgaged property to your brother since he is not named on the existing mortgage and you cannot simply "transfer" him on to it. Your brother would need to take out a brand new mortgage with (or without) your mother and would therefore have to meet a lender's affordability criteria in order to get that mortgage.

    5. if your brother can get a mortgage himself (with or without mother) then the old mortgage (mother and you) will need to be paid off. Brother (and mother if applic) would make that payment using the money from their new mortgage. Assuming that payment is around the 80k mark then there would be no SDLT payable as it is below the threshold
    • scsar88
    • By scsar88 8th Feb 18, 11:00 PM
    • 11 Posts
    • 1 Thanks
    scsar88
    • #3
    • 8th Feb 18, 11:00 PM
    • #3
    • 8th Feb 18, 11:00 PM
    thanks 00ec25, in my post I did miss the part of the re-papering of the mortgage which obviously needs to be done. Both my mum and brother are in a situation to get one my worries were more around the cost of Stamp duty but I think you have cleared this up.

    many thanks
    • xylophone
    • By xylophone 9th Feb 18, 12:08 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #4
    • 9th Feb 18, 12:08 PM
    • #4
    • 9th Feb 18, 12:08 PM
    Why do you wish to "gift" your share in the property?

    If both your mother and brother can obtain a mortgage, why are they not buying you out so that you can use your share of the equity to finance your new home?
    • scsar88
    • By scsar88 9th Feb 18, 5:10 PM
    • 11 Posts
    • 1 Thanks
    scsar88
    • #5
    • 9th Feb 18, 5:10 PM
    • #5
    • 9th Feb 18, 5:10 PM
    Why do you wish to "gift" your share in the property?

    If both your mother and brother can obtain a mortgage, why are they not buying you out so that you can use your share of the equity to finance your new home?
    Originally posted by xylophone
    Good point, I initially only took on the property due to my dads bankruptcy, now everyone is doing better financially and i do not need to rely on receiving any money for the purchase of my new place so it makes sense to gift it without any money exchanging.
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