Possible tax on a transaction

[Monty22]

Wonder if anybody can offer some advice on the following situation and what it could potentially mean for me in terms of tax.

Back in 2017 I invested in a property in Spain with my parents. I put in £32,000 and my parents put in the rest. And in the event that something happened to my parents the property was put in my name as the sole owner.

Fast forward 5 years and my circumstances have changed. Now I have a young family and realistically I want to move house in the next year or two and ideally I could do with the money back which I invested. Me and my parents have spoken to solicitors in Spain and the easiest way to do this is to transfer the ownership between family members and put the apartment in my mum's name. My parents would then give me back the money i put in plus a small amount for appreciation totaling £35000.

Before commencing on this I am wanting to check that everything would be above board with such an amount hitting my bank account. I don't want to be in a situation down the line where I have to justify the transaction to the tax man.

Any advice welcome.
Thanks.

[Eric Mc]

Monty22 said:

and the easiest way to do this is to transfer the ownership between family members and put the apartment in my mum's name.
Thanks.

What does this mean?

Who will own the property?

[Monty22]

Eric Mc said:

What does this mean?

Who will own the property?

I’ve been informed it would be done as a gift between myself and my mum and my mum would become the owner. In hindsight I probably need to speak to a solicitor about this as if money is changing hands then it isn’t a gift.

[Eric Mc]

And money changing hands usually means (at least) that Cpaital Gains Tax needs to be considered.

[xx99xx]

If parents are keeping the house for now, presumably they have £35k in cash ready to give you, should you go down the proper legal transfer route?

If so, why not ask them for that as a gift to help buy a house (like a lot of parents do) and call it quits with the investment as an informal agreement between you.

[Mr Pointy]

Eric Mc said:

And money changing hands usually means (at least) that Cpaital Gains Tax needs to be considered.

Even if the property is in Spain?

[Eric Mc]

Mr Pointy said:

Even if the property is in Spain?

Oh yes (if the owners are UK tax residents).

[Simpo Two]

I was wondering if the parents could simply gift £35K to the OP (PET) and then live seven years so it's tax free.

[Monty22]

xx99xx said:

If parents are keeping the house for now, presumably they have £35k in cash ready to give you, should you go down the proper legal transfer route?

If so, why not ask them for that as a gift to help buy a house (like a lot of parents do) and call it quits with the investment as an informal agreement between you.

Good suggestion and probably the easiest solution. The taxes and fees I would incur through a proper sale isn’t worth it just to change the name on the property. I think I will put this idea to my parents.