Transfer of ownership - Property
Discussion
I have a flat which i would like to be transferred to my parents name, mother for example. They are retired.
I lived in the flat for approx 1 year after which it has been on rent.
Are there tax implications etc for transfer of ownership?
There is a mortgage on the property, I can pay it off but would prefer not too if possible.
I will continue making the payments, via mothers account if neccessary.
Am I opening myself up (or parents) to any sort of liability by changing the name on the deed?
Thanks
I lived in the flat for approx 1 year after which it has been on rent.
Are there tax implications etc for transfer of ownership?
There is a mortgage on the property, I can pay it off but would prefer not too if possible.
I will continue making the payments, via mothers account if neccessary.
Am I opening myself up (or parents) to any sort of liability by changing the name on the deed?
Thanks
Various reasons but mainly tax purposes.
No below market value stuff, I'm not selling the property to them or anyone.
Just literally want it out of my name on to theirs.
I'm assuming the mortgage people would have an issue seeing as my parents are retired and therefore considered a risk?
No below market value stuff, I'm not selling the property to them or anyone.
Just literally want it out of my name on to theirs.
I'm assuming the mortgage people would have an issue seeing as my parents are retired and therefore considered a risk?
essentially it's not really yours till it's paid off.. it's possible to transfer it all to your parents (or anyone else) but basically you'd be going through the normal sales process & all that entails.
If might help some of the clever people on here if they understood what you are trying to achieve by this, there may be options you haven't considered.
If might help some of the clever people on here if they understood what you are trying to achieve by this, there may be options you haven't considered.
Nish said:
Various reasons but mainly tax purposes.
No below market value stuff, I'm not selling the property to them or anyone.
That's not selling then, it's giving. Which is the same as selling at 100% less than market value.No below market value stuff, I'm not selling the property to them or anyone.
Be VERY VERY careful. That means speaking to a specialist accountant direct, instead of on here.
Nish said:
Various reasons but mainly tax purposes.
I'm assuming the mortgage people would have an issue seeing as my parents are retired and therefore considered a risk?
Your lender definately will have an issue. The deeds need to be in the same name as the mortgage, remember all the lender cares about is getting the property if you default on the mortgage. If the property is suddenly in someone elses name they then have no security which they wont like. I'm assuming the mortgage people would have an issue seeing as my parents are retired and therefore considered a risk?
As your parents are retired, this may not be so much of an issue if they have an income sufficent to support the mortgage, without knowing the value of the flat, mortgage outstanding & parents income we cant know how much of a prob this maybe.
Are you looking to sell the flat & avoid cap gains by putting it in your parents name, assuming they are nil rate tax payers? Thats one of the only reasons I can see, speak to an accountant mate, you have 3 years from moving out your main res before cap gains is an issue. (atleast it was 3 years when I did my exams a while back!) so you may not pay any anyway.
Capital Gains Tax is chergeable on disposals of assets. This is the disposal of an asset so CGT MUST be reckoned with.
The proceeds on this disposal will be precisely Nil, as you are planning on transferring it to your parents (who are deemed to be "Connected Persons" in CGT law)for no consideration. However, the tax man will not be fooled by this and will insist that the disposal has taken place for a consideration of the deemed market value. Therefore, you could have the problem of paying a Capital Gains Tax bill without having realised any cash on the disposal. That may be OK if you have sufficient cash reserves sitting in a bank account somewhere irresepective of whether you receive cash on this particular disposal or not.
The property was your main residence for 1 year. THerefore it will be partially exempt from CGT. Basically, the period it was your Main Residence plus 3 extra years are taklen into account. If, for example, you owned the property for 8 years altogther, 1 year plus 3 (i.e. 4) would be deemed to be exempted from CGT and the Capital Gain would therefore be reduced by 50%.
Threre are also Inheritance Tax issues.
Is this a staright gift with no strings attached. If your parents become owners of the property do you relinquish all rights to the property - forever?
The proceeds on this disposal will be precisely Nil, as you are planning on transferring it to your parents (who are deemed to be "Connected Persons" in CGT law)for no consideration. However, the tax man will not be fooled by this and will insist that the disposal has taken place for a consideration of the deemed market value. Therefore, you could have the problem of paying a Capital Gains Tax bill without having realised any cash on the disposal. That may be OK if you have sufficient cash reserves sitting in a bank account somewhere irresepective of whether you receive cash on this particular disposal or not.
The property was your main residence for 1 year. THerefore it will be partially exempt from CGT. Basically, the period it was your Main Residence plus 3 extra years are taklen into account. If, for example, you owned the property for 8 years altogther, 1 year plus 3 (i.e. 4) would be deemed to be exempted from CGT and the Capital Gain would therefore be reduced by 50%.
Threre are also Inheritance Tax issues.
Is this a staright gift with no strings attached. If your parents become owners of the property do you relinquish all rights to the property - forever?
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