Transfer house to son

android-fan · 18 Jun 2021 at 19:14

I bought a property along with my son a few years ago. As it was mainly funded by myself, I put the property in my name. Over the last few years he's paid me off in full ( or will have in the next few months). He'll be paying me exactly what it was purchased for.

I'd now like to transfer the property into his name. Any advice on the best/easiest way of doing this (hopefully without having to use solicitors), without any tax implications?

P.S. the property was bought quite cheaply as it needed quite a lot of work on it.

Deleted member 77746 · 18 Jun 2021 at 19:18

You still need to go through solicitors to transfer the property to choose which way you need to proceed.

4 ways to gift it..
1. Sale and Purchase at full market value
2. Concessionary Sale and Purchase at under market value
3. Deed of Gift, also known as a 'Transfer by Way of Gift'
4. Transfer of Equity

See a solicitor.

montymint · 18 Jun 2021 at 19:18

android-fan said:
I bought a property along with my son a few years ago. As it was mainly funded by myself, I put the property in my name. Over the last few years he's paid me off in full ( or will have in the next few months). He'll be paying me exactly what it was purchased for.

I'd now like to transfer the property into his name. Any advice on the best/easiest way of doing this (hopefully without having to use solicitors), without any tax implications?

P.S. the property was bought quite cheaply as it needed quite a lot of work on it.

Best thing to do is get a solicitor involved and seek real advice from them.

android-fan · 18 Jun 2021 at 19:25

Thanks, sounds like option 1 is the most applicable. Will talk to solicitor as you suggest but land registry does have guidance on doing this yourself

https://youtu.be/BeWNb8XAn4c

Bouton Aide said:
You still need to go through solicitors to transfer the property to choose which way you need to proceed.

4 ways to gift it..
1. Sale and Purchase at full market value
2. Concessionary Sale and Purchase at under market value
3. Deed of Gift, also known as a 'Transfer by Way of Gift'
4. Transfer of Equity

See a solicitor.

Deleted member 77746 · 18 Jun 2021 at 19:34

android-fan said:
but land registry does have guidance on doing this yourself

Uhm then get the form fill it out and post it?

Don't think that it will be that simple though.

BUDFORCE · 18 Jun 2021 at 20:32

You'll have to pay stamp duty tax if you sell the property.

Transfer of equity but pretty sure you'll need to do this through a solicitor.

android-fan · 18 Jun 2021 at 20:50

This is my son's first property and the house value is well under any stamp duty band that will require anything to be paid

Semple · 18 Jun 2021 at 21:11

android-fan said:
I bought a property along with my son a few years ago. As it was mainly funded by myself, I put the property in my name. Over the last few years he's paid me off in full ( or will have in the next few months). He'll be paying me exactly what it was purchased for.

I'd now like to transfer the property into his name. Any advice on the best/easiest way of doing this (hopefully without having to use solicitors), without any tax implications?

P.S. the property was bought quite cheaply as it needed quite a lot of work on it.

Definitely get a solicitor involved.

Assuming this wasn't your primary residence? It's not too clear from your statement on the situation, has your son paid you the value of the house over the last few years? Either way, you're likely to end up having to pay CGT on the market value of the property - not what you sell it to him for.

android-fan · 18 Jun 2021 at 23:45

Correct on both accounts. I've never lived in the property and he'll very soon have paid me off in full.

Will the market value be as of now or when we agreed the sale, as there as a big difference between the two. Think I need to talk to a solicitor as suggested!

a1ex2001 · 19 Jun 2021 at 08:09

android-fan said:
Correct on both accounts. I've never lived in the property and he'll very soon have paid me off in full.

Will the market value be as of now or when we agreed the sale, as there as a big difference between the two. Think I need to talk to a solicitor as suggested!

This definitely needs a solicitor if you want to make sure you minimise costs and it is all above board. Doing the land registry but yourself is fine but I wouldn’t in this case, really you should have taken financial/legal advice on this at the time of purchase as it would have likely opened up lots of options.

HangTime · 19 Jun 2021 at 22:25

IANAL but I'm pretty sure market value would be as it is now. Otherwise it would be a potential tax dodge, "oh yeah the house I bought 30 years ago, I agreed 30 years ago to sell it to my son for that price innit, I know it's gone up 10x in value but we're taking market value is from 1991".

arknor · 20 Jun 2021 at 00:03

HangTime said:
IANAL but I'm pretty sure market value would be as it is now. Otherwise it would be a potential tax dodge, "oh yeah the house I bought 30 years ago, I agreed 30 years ago to sell it to my son for that price innit, I know it's gone up 10x in value but we're taking market value is from 1991".

you'd think so but whats to stop anyone from selling their house for under market value? would they then be taxed on the actual valuation?
there must be some kind of loophole.

if you bought a house for your son in 1991 for 40k and verbally agreed at the time that he will pay you in regular instalments and once fully paid off the house is his?

surely it's binding? the son makes no profit unless he sells?

and this is why you need an expert

HangTime · 20 Jun 2021 at 00:30

arknor said:
you'd think so but whats to stop anyone from selling their house for under market value? would they then be taxed on the actual valuation?
there must be some kind of loophole

There might be a loophole but my understanding is this is something that specifically looked at when it comes to things like dodging inheritance tax, you can't just sell your £2m mansion to your family for £1 shortly before death to dodge the tax.

I appreciate this case is a bit more nuanced though as it involves payments over a period of years, so as noted sounds like some legal advice is needed.

Destination · 20 Jun 2021 at 08:49

android-fan said:
Thanks, sounds like option 1 is the most applicable. Will talk to solicitor as you suggest but land registry does have guidance on doing this yourself

https://youtu.be/BeWNb8XAn4c

Do you live in the house?
As if you pick option 1, he'll actually have to buy it from you, and pay associated taxes, stamp duty etc, if he has actually bought it out in instalments, then you can just gift it over to him.
That'll be free from any taxes, with exception of inheritance if you die within 7 years, but if it is low value property then it won't affect that either.
You will need a solicitor to have the deed of ownership transferred,

Semple · 20 Jun 2021 at 19:37

arknor said:
you'd think so but whats to stop anyone from selling their house for under market value? would they then be taxed on the actual valuation?

CGT is due on the market value. So you could sell your property to your son for £1. But if the market value is £2mil, then you'd pay the CGT on the 2mil - which assuming you'd be a higher rate taxpayer would work out quite a sizeable amount.

Hence really a solicitor is needed to advise you the best way of "selling" the property to your son whilst ensuring you only pay the correct amount of tax due.

Psycho Sonny · 20 Jun 2021 at 21:05

android-fan said:
This is my son's first property and the house value is well under any stamp duty band that will require anything to be paid

It will be fully liable for capital gains tax though by you not him

pp111 · 21 Jun 2021 at 08:03

Psycho Sonny said:
It will be fully liable for capital gains tax though by you not him

You need to get a solicitor involved right now. You can not just transfer properties like this. There are tax implications. The amounts involved are not just what was paid for it, but what it's current market value is. Certainly stamp duty is based on that, not on actually how much it "used to be". Be advised that you also have to be very careful how you even word this to a solicitor, in that I found out a few years back that if anything is interpreted as "trying to avoid tax" when you are talking about properties then the solicitor is bound by law to report you to HMRC.

MikeTheNative · 21 Jun 2021 at 09:34

Just get a solicitor. No idea of what the fees will be but even a few thousands is a small proportion for what the value of the house is.

The_Arbiter · 21 Jun 2021 at 09:47

pp111 said:
if anything is interpreted as "trying to avoid tax" when you are talking about properties then the solicitor is bound by law to report you to HMRC.

This, very much.

I'd not jump straight to a solicitor without some heavy research first. My inexperienced opinion is solicitors in the housing sector get commission, so therefore untrustworthy with what is best for you. Sorry to any out there that don't like being tarnished by the same brush. I'll add i'm not saying don't go to a solicitor, just see if there's certain avenues worth taking, then go there.

Psycho Sonny · 21 Jun 2021 at 10:26

pp111 said:
You need to get a solicitor involved right now. You can not just transfer properties like this. There are tax implications. The amounts involved are not just what was paid for it, but what it's current market value is. Certainly stamp duty is based on that, not on actually how much it "used to be". Be advised that you also have to be very careful how you even word this to a solicitor, in that I found out a few years back that if anything is interpreted as "trying to avoid tax" when you are talking about properties then the solicitor is bound by law to report you to HMRC.

That's rubbish. I've had solicitors actively advise on the best way to avoid inheritance tax. Avoidance isn't illegal. Evasion is.

So I would suggest you completely ignore this post.

If you are talking about evading CGT or SDLT then you may have a point but avoiding IHT is perfectly legal.

Transfer house to son

Pet Northerner