Transfering Property

[Crazyface]

Morning! Been away for a few days and during that time we (me and the wife) had many discussions over things. But big one is this. We hav a property in my name that we wish to transfer over to our son. Now we know that there will be Capital Gains Tax to pay and have checked that out on the Gov website, but can I cannot find the definitive answer to the questions :-

1. Will we have to pay stamp duty? (Gov site indicates no, but another random solictors site says yes over £250K)
2. Which blooming Gov forms do we need to complete. TR1 sure, but do we need AP1 and ID3 as well?

Cannot find answers online so I turn to the fountain of knowledge that is here.

 

[jim8flog]

I have only ever done this once (bit simpler because it was a transfer from the wife to me) everything I needed to know I got from the Land Registry guides.

 

[Neilds]

I would suggest getting some professional advice - advice from a forum can be sketchy at best

 

[RichA]

My MiL was advised to transfer ownership of her house to her two children to avoid inheritance tax by some wealth obsessed individuals in the family.
They didn't point out that if either of her children and their partners split up while she was still alive then she would have to sell the house to settle their divorces as it would belong to them, not her.
Think carefully before you do it. Most organisations that advise older folks suggest it's a bad idea.

 

[Crazyface]

My MiL was advised to transfer ownership of her house to her two children to avoid inheritance tax by some wealth obsessed individuals in the family.
They didn't point out that if either of her children and their partners split up while she was still alive then she would have to sell the house to settle their divorces as it would belong to them, not her.
Think carefully before you do it. Most organisations that advise older folks suggest it's a bad idea.

We're ok with the pitfalls. They don't actually apply, it's, in reality, theirs anyway. Pro advice, solicitors, is crazy expensive, and it's just form filling and paying correct dues to HMRC.

 

[Rlburnside]

I’ll be doing the same shortly, can’t help about stamp duty but it’s better to do it sooner rather than later as there’s a 7 year period that god forbid anything happens to you or your partner whoever you pass it on too might be liable for costs in the future.

I will be getting advice from my solicitor.

 

[PJ87]

I’ll be doing the same shortly, can’t help about stamp duty but it’s better to do it sooner rather than later as there’s a 7 year period that god forbid anything happens to you or your partner whoever you pass it on too might be liable for costs in the future.

I will be getting advice from my solicitor.

They are getting really hot on it.

You get up to 1 million tax free if passing to your kids (if it's both of you)

However when my dad looked into it there was things about having to sell at market rate to avoid HMRC looking or if you transfer it then you have to rent it back to them at market rate.

 

[GB72]

Morning! Been away for a few days and during that time we (me and the wife) had many discussions over things. But big one is this. We hav a property in my name that we wish to transfer over to our son. Now we know that there will be Capital Gains Tax to pay and have checked that out on the Gov website, but can I cannot find the definitive answer to the questions :-

1. Will we have to pay stamp duty? (Gov site indicates no, but another random solictors site says yes over £250K)
2. Which blooming Gov forms do we need to complete. TR1 sure, but do we need AP1 and ID3 as well?

Cannot find answers online so I turn to the fountain of knowledge that is here.

All sorts of considerations here. Stamp Duty is paid on the consideration and not on the value.
The TRi is the transfer, the AP1 is the application to the land registry to update the legal title. You will all need completed forms ID1 that you have to go to a solicitor for to pass the land registry identification requirements.

Have you considered what happens if you fall out with your son or, heaven forbid, he were to pre-decease you and someone else inherits the property. How are you protected from it being sold out from under you. Have you looked at a life tenancy.

Basically, get professional advice both on the transfer and to ensure that gifting the property will achieve what you want it to as that is certainly not always the case.

 

[Bunkermagnet]

Morning! Been away for a few days and during that time we (me and the wife) had many discussions over things. But big one is this. We hav a property in my name that we wish to transfer over to our son. Now we know that there will be Capital Gains Tax to pay and have checked that out on the Gov website, but can I cannot find the definitive answer to the questions :-

1. Will we have to pay stamp duty? (Gov site indicates no, but another random solictors site says yes over £250K)
2. Which blooming Gov forms do we need to complete. TR1 sure, but do we need AP1 and ID3 as well?

Cannot find answers online so I turn to the fountain of knowledge that is here.

As has been said, they are very hot on this now since we have to pay for our own social care.
What you won't be able to do is live there rent free after you have done it.
We were looking at it when both my parents were alive to try and save the house having to be sold in the event of either needing to go into a home.
As it worked out, not doing that with their house was a good thing and the social care costs for my mum didn't impact that greatly on what us 3 boys got.

 

[VVega]

FWIW, make sure you have evidence of the "market value" for the transfer as it dictates everything pretty much... AFAIK, the most reliable way is to get a surveyor to give you a "Red book" valuation as it's supposed to be accepted by the HMRC. Anything else can be queried...

 

[GreiginFife]

All sorts of considerations here. Stamp Duty is paid on the consideration and not on the value.
The TRi is the transfer, the AP1 is the application to the land registry to update the legal title. You will all need completed forms ID1 that you have to go to a solicitor for to pass the land registry identification requirements.

Have you considered what happens if you fall out with your son or, heaven forbid, he were to pre-decease you and someone else inherits the property. How are you protected from it being sold out from under you. Have you looked at a life tenancy.

Basically, get professional advice both on the transfer and to ensure that gifting the property will achieve what you want it to as that is certainly not always the case.

Does HMLR have provision for non-monetary considerations?

In Scotland transfer to designed survivor is quite common using NMC.

 

[jim8flog]

They are getting really hot on it.

You get up to 1 million tax free if passing to your kids (if it's both of you)

However when my dad looked into it there was things about having to sell at market rate to avoid HMRC looking or if you transfer it then you have to rent it back to them at market rate.

I presume you mean the parent has to pay rent to the child(ren). That applies to the main residence. I read that as Crazyface is transferring ownership of another property and the 7 year rule applies as it does to all transfers of assets for IHT purposes.

 

[jim8flog]

Morning! Been away for a few days and during that time we (me and the wife) had many discussions over things. But big one is this. We hav a property in my name that we wish to transfer over to our son. Now we know that there will be Capital Gains Tax to pay and have checked that out on the Gov website, but can I cannot find the definitive answer to the questions :-

1. Will we have to pay stamp duty? (Gov site indicates no, but another random solictors site says yes over £250K)
2. Which blooming Gov forms do we need to complete. TR1 sure, but do we need AP1 and ID3 as well?

Cannot find answers online so I turn to the fountain of knowledge that is here.

Following other replies is this your main residence or another property?

 

[PaulMdj]

My son is disabled and we were worried about his future after me and the wife have gone.
We got professional advice on trust funds etc.

During the meeting with the financial advisors I asked about signing the house over to my lad, sooner rather than later, worried about the “7 year rule” etc and we were advised the 7 year thing is an Urban myth, for instance, if we signed the house over and 10 years down the line, god forbid me or the wife has passed away and the other one needs to go in to care, the local authority can still use the house as part of the remaining spouses assetts as putting the house in your sons name did not negate the reason for you needing somewhere to live and was purely to try and avoid other financial liabilities.

As others have said, I would go and get proper legal advice rather than information off us lot on here.

 

[Fade and Die]

My son is disabled and we were worried about his future after me and the wife have gone.
We got professional advice on trust funds etc.

During the meeting with the financial advisors I asked about signing the house over to my lad, sooner rather than later, worried about the “7 year rule” etc and we were advised the 7 year thing is an Urban myth, for instance, if we signed the house over and 10 years down the line, god forbid me or the wife has passed away and the other one needs to go in to care, the local authority can still use the house as part of the remaining spouses assetts as putting the house in your sons name did not negate the reason for you needing somewhere to live and was purely to try and avoid other financial liabilities.

As others have said, I would go and get proper legal advice rather than information off us lot on here.

It’s only a myth for the local authorities, not the tax man. If you live more than 7 years after transferring the house over to your son then it’s exempt from inheritance tax.
As you say, proper legal advice is essential, a lot of these rules are nuanced, we was told as my brother lives with my dad then it would affect the local authority assessment, if it come to him needing to go in a home.

 

[Crazyface]

Following other replies is this your main residence or another property?

Another, inheritance

 

[Crazyface]

Complicated init?

 

[Crazyface]

What we are finding is that because I inherited this, and the value has increased, I have to pay a tax on something that I want to give away for free because it has increased in value since I got it. But wasn't taxed when I got it as it was below the tax inheritance value. What a sack of poo this is!

 

[Crazyface]

Also, it appears there will be a reduction of tax rebate in the next budget so we are trying to push this though now!!!!!

 

[Crazyface]

I’ll be doing the same shortly, can’t help about stamp duty but it’s better to do it sooner rather than later as there’s a 7 year period that god forbid anything happens to you or your partner whoever you pass it on too might be liable for costs in the future.

I will be getting advice from my solicitor.

Get your wallet ready.....