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Gifting Property


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Good Morning All,

I recently went to one of the property hub meet up groups, which was great, where I found out about "gifting" property.

My situation is my parents have a BTL property of which they own outright (no mortgage), but are looking to sell it to support their retirement. I have said I would like to buy it from them, but have then found about gifting, where they could gift the property to me and I would remortgage the property and the gift them the money back. They bought the house for £175k and its now worth double this at £350k.

I am wondering what fees I will have to pay? Stamp duty? inheritance tax? capital gains tax?

At the meet up, I met 1 person who did this without paying any fees at all and another who had to pay stamp and capital gains.

Is it also possible to gift ownership to half a house rather than the whole thing?

Any one that can point me in the right direction, or the right person to speak to, would be fantastic!

Thanks all

James

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Overall, if you could structure property transactions as 'gifts' of property in one direction and 'gifts' of money in the opposite direction and not pay taxes, I think everyone would be doing that.

Stamp duty: the money that you gift your parents will be 'chargeable consideration', which is subject to SDLT.  if you already own a property then i'd imagine that you would have to pay the additional 3% as well: https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property

Capital gains tax: the gift of the BTL to you would be treated as a disposal and your parents would need to pay CGT on the gain - subject to allowances etc.: https://www.gov.uk/capital-gains-tax/what-you-pay-it-on

Inheritance tax: nothing unless your parents die within 7 years and then the element which is a 'gift' (i.e. property value - consideration returned as gift) is added back to their estate when calculating IHT: https://www.gov.uk/inheritance-tax/gifts

I am not a tax expert.  DYOR.

HTH

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