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Parents transfer home/mortgage to son


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Hi all,

this feels like it needs a bit of legal, accountancy and mortgage advice all in one!! I will try and keep it succinct.

Current house in mum/dad name along with mortgage in their name. Currently son lives in the house and effectively pays the mortgage by transferring money to mum each month. 

Objective: Mum/dad looking to clear mortgage next year and transfer ownership of house to son. So son to take on his own mortgage or take over existing mortgage.

Implications that I can see:

1) CGT for mum/dad: if sell to son at market value I think this will attract CGT on the uplift in value of the property (circa £200k), not a preferred option

2) IHT for mum/dad: Option to gift house to son negating CGT (I think?), will be classed as potentially exempt gift and assuming mum & dad don't die within 7 years no chargeable gain from IHT perspective?

3) Mortgage/title deeds transfer: Assuming option 2 is available how hard is it to transfer mortgage/title deeds. Feels like you are shackled to existing lender or is it still straightforward to take out new mortgage under son name and repay existing mortgage in mum/dad name?

4) Stamp duty: Are there any stamp duty implications on transfer? He is first time buyer but house value is near to £500k mark so if valued over may be subject to a bit of stamp duty.

is there anything else i'm missing? this feels like a complicated scenario but maybe it is more straightforward than I think!

Any advice or pointers would be greatly appreciated!!

all the best.



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1) Did mum/dad ever live in the property? Main home relief might reduce CGT. If they bought it for their son, then no CGT and the IHT clock might have already started. Need more background info…

2) They can’t avoid CGT on a gift unless put property into a Trust or company making it a chargeable lifetime transfer for IHT purposes. CGT relief can then be applied but then there’s ten year principal charges in Trust or lots of tax issues if in a company…

3) Should be fairly straightforward  - best talk to a broker though! Credit history and affordability matter here.

4) No SDLT if structured as an unencumbered gift. Otherwise normal rates apply on value of debt transferred (not the market value of property) with possible first time buyer relief applying.





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Hi Taxantics,

thanks for taking the time to respond.

1) As far as I know mum/dad haven't lived in the property but if they did I presume they need to show evidence of this (i.e. council tax bill with their name on it?). I believe unofficially they brought it for their son, it was certainly the intention to buy it and him live in it but not sure if any documentation would be required to prove this? If CGT does apply my understanding is you get last 18 months relief regardless which will help soften the blow!

2) ok thanks I hadn't realised that.

3 & 4) thanks

thanks again


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Hi James, if they lived in the premises as a matter of fact, then evidence is only really needed if HMRC do challenge a claim for relief or they owned another home they did or could have lived in.

If they bought the property for their son from the outset so that beneficial interest was always with him, then its possible to document the arrangement and make representation to HMRC for advance clearance that no CGT would apply on transfer of legal interest to their son.

If CGT were to apply because the parents never lived in the property and it wasn't their son's property at the time of second legal transfer, then there would be no CGT relief at all because the parents never lived in the property and couldn't claim any principal private residence (PPR) relief. The 18 months deemed occupation period you refer to is only linked to PPR relief and has actually been reduced to just the final 9 months from 6 April 2020. There are recommendations out there to reduce it further to just 3 months...

If the parents purchased the property on Trust for their son, then:

1. PPR relief should be available in full provided the son always lived in the property as beneficial owner during the period of ownership;

2. The SDLT rate applicable on first purchase may have been 0% if first time buyer relief was available then (a repayment may be due);

3. There should be no SDLT on legal transfer to the son who should be regarded as already the owner by the Stamp Office; and 

4. The IHT clock on the PET/CLT has been ticking since date of purchase.

Anyone reading this should be aware that if anyone buys property for someone else, then tax advice and documentation are important as the advice often saves more than it costs as well as preventing issues!








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