Parents want to gift sister and I a house
Discussion
I suspect I may need professional legal advice for this but I’m hoping so posters can point me in the right direction.
My parents are 66 and have second house worth £180k with no mortgage, they want to gift it to my sister and I.
How do they do this/who do they need to speak with, and are there any tax implications other than the 7-year tax inheritance rule which could potentially occur if the worst happens?
Secondly, once the house is legally in mine and my sisters name, we want to rent it out and share the income. If the tenant pays me direct, and I then send my sister 50%, will I just need to declare the 50% on my self-assessment or are HMRC going to want me to declare all of it?
The reason being I am a higher rate tax payer and my sister is not, so I’d be paying 40% both shares.
My parents are 66 and have second house worth £180k with no mortgage, they want to gift it to my sister and I.
How do they do this/who do they need to speak with, and are there any tax implications other than the 7-year tax inheritance rule which could potentially occur if the worst happens?
Secondly, once the house is legally in mine and my sisters name, we want to rent it out and share the income. If the tenant pays me direct, and I then send my sister 50%, will I just need to declare the 50% on my self-assessment or are HMRC going to want me to declare all of it?
The reason being I am a higher rate tax payer and my sister is not, so I’d be paying 40% both shares.
Thanks guys.
Just to add a bit more detail, my parents bought the house for £140k as a BTL (no mortgage though). They want to sell up now and give my sister and I the money which in truth would be the easiest and most preferred option.
However, its been on market for 9 months without a single offer and now they just want rid, reducing the price is the obvious answer but they've got it into their minds to gift it to us both and so it's no longer on their plate.
Truth be told I don't mind the idea of renting it out, as I have been a landlord in the past so I know what I'm getting into. I just want to do it in the most tax efficient way possible.
Having a google, I believe my parents will need to pay capital gains tax on the value the property has increased by (approximately £40k) minus any allowance? What if I then decide to sell in 18 months time, do I have to pay CGT? If someone could advise further on this then that would be great.
Just to add a bit more detail, my parents bought the house for £140k as a BTL (no mortgage though). They want to sell up now and give my sister and I the money which in truth would be the easiest and most preferred option.
However, its been on market for 9 months without a single offer and now they just want rid, reducing the price is the obvious answer but they've got it into their minds to gift it to us both and so it's no longer on their plate.
Truth be told I don't mind the idea of renting it out, as I have been a landlord in the past so I know what I'm getting into. I just want to do it in the most tax efficient way possible.
Having a google, I believe my parents will need to pay capital gains tax on the value the property has increased by (approximately £40k) minus any allowance? What if I then decide to sell in 18 months time, do I have to pay CGT? If someone could advise further on this then that would be great.
Gassing Station | Finance | Top of Page | What's New | My Stuff