Buying A Property In Trust??
Discussion
Ok so this is new territory for me, we have been offered an opportunity to buy back a 1 bedroom apartment which we owned from new and then sold to my dad when my parents split up.
My dad is now looking to move on and has offered us a chance to buy it back, we want to be as shrewd as possible though so as not to incur any unnecessary tax etc. We would also like to plan ahead for our daughters future and wondered if buying the property in trust for our daughter would be a good/straightforward idea??
The thinking being that one day she will have ownership of a property which she can either live in, continue renting out as a source of income or sell towards her own purchase.
Is this doable and where is the best place to start?
We have built up considerable equity in our own home some of which we would to release as a deposit, intiial number crunching suggests that we would be looking at a monthly repayment figure of £390 and a rental of around £550-£600 the difference between the two figures is obviously classed as income - if it was in trust would it affect the amount of tax that we pay or not?
This is all new to me so apologies if some of it is basic!?!?!?
Cheers
Si
My dad is now looking to move on and has offered us a chance to buy it back, we want to be as shrewd as possible though so as not to incur any unnecessary tax etc. We would also like to plan ahead for our daughters future and wondered if buying the property in trust for our daughter would be a good/straightforward idea??
The thinking being that one day she will have ownership of a property which she can either live in, continue renting out as a source of income or sell towards her own purchase.
Is this doable and where is the best place to start?
We have built up considerable equity in our own home some of which we would to release as a deposit, intiial number crunching suggests that we would be looking at a monthly repayment figure of £390 and a rental of around £550-£600 the difference between the two figures is obviously classed as income - if it was in trust would it affect the amount of tax that we pay or not?
This is all new to me so apologies if some of it is basic!?!?!?
Cheers
Si
... or start a pension and an ISA for her. Nice and simple. Gifts of £3,000 p.a. completely outside the scope of Inheritance Tax and both vehicles have great tax advantages in the long term.
Trusts are a nightmare. Property is hassle. The party may not be over but they've certainly turned down the music.
Trusts are a nightmare. Property is hassle. The party may not be over but they've certainly turned down the music.
Ozzie Osmond said:
Trusts are a nightmare. Property is hassle. The party may not be over but they've certainly turned down the music.
Great, just ruined my day 
we are in the process of probate on a £250k property that according to the will we are supposed to put into trust somehow for my kids as they are not 18 yet (one is in 6 months if I drag it out a bit ?)I suppose the only difference is the property is already owned outright so no mortgage or finance needed.
SiT said:
Ok so this is new territory for me, we have been offered an opportunity to buy back a 1 bedroom apartment which we owned from new and then sold to my dad when my parents split up.
My dad is now looking to move on and has offered us a chance to buy it back, we want to be as shrewd as possible though so as not to incur any unnecessary tax etc. We would also like to plan ahead for our daughters future and wondered if buying the property in trust for our daughter would be a good/straightforward idea??
The thinking being that one day she will have ownership of a property which she can either live in, continue renting out as a source of income or sell towards her own purchase.
Is this doable and where is the best place to start?
We have built up considerable equity in our own home some of which we would to release as a deposit, intiial number crunching suggests that we would be looking at a monthly repayment figure of £390 and a rental of around £550-£600 the difference between the two figures is obviously classed as income - if it was in trust would it affect the amount of tax that we pay or not?
This is all new to me so apologies if some of it is basic!?!?!?
Cheers
Si
No right/wrong answer. Tax charges would also potentially arise during the lifetime of the trust, on every tenth anniversary of its creation, and unless you apply holdover relief, would a CGT charge be applied? Trusts cost, too. Without knowing the detail, if the trust property was given by you, as the child’s parent, to the trust, would you be taxed on the income as it exceeds £100 pa? I spent Friday looking if residential property CG could be deferred into an EIS (ie gains otherwise at 18/28, however, if rolled into an EIS for CGT deferral relief would they be taxed instead, at 10/20 on the way out?). Am proceeding and researching very cautiously as this is probably a loophole just waiting to be tightened.. My dad is now looking to move on and has offered us a chance to buy it back, we want to be as shrewd as possible though so as not to incur any unnecessary tax etc. We would also like to plan ahead for our daughters future and wondered if buying the property in trust for our daughter would be a good/straightforward idea??
The thinking being that one day she will have ownership of a property which she can either live in, continue renting out as a source of income or sell towards her own purchase.
Is this doable and where is the best place to start?
We have built up considerable equity in our own home some of which we would to release as a deposit, intiial number crunching suggests that we would be looking at a monthly repayment figure of £390 and a rental of around £550-£600 the difference between the two figures is obviously classed as income - if it was in trust would it affect the amount of tax that we pay or not?
This is all new to me so apologies if some of it is basic!?!?!?
Cheers
Si
http://www.publications.parliament.uk/pa/bills/cbi...
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