Gifting joint ownership to cohabiting partner, not a civil partner. Tax implications?

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  • Gifting joint ownership to cohabiting partner, not a civil partner. Tax implications?

    My heterosexual partner, therefore not civil partner, wants to gift part ownership of our home to me and we would therefore become joint tenants (as co-owners). The property at the moment is owned by three people (my partner, his sister and her husband). It was a large church and has been converted into two properties so the three of them will transfer ownership of one property into his sister and her husband’s name and the other property into his and my name. I am concerned about the financial implication of gifting co-ownership of a property to me. If this makes sense, can anyone advice please. One title number in three names being transferred into two new title numbers; one married couple will own one and my co-habitee partner and I will own the other. My solicitor said there are no tax implications but I really believe he is wrong.

  • Gordon999
    replied
    If it is the main residence of the 3 donors before the whole property is converted into 2 flats , I would expect the council tax bill or electric bill to show 3 donor names ??

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  • pebblepebble
    replied
    Originally posted by Gordon999 View Post
    The 2 types of tax to clarify before making a transfer of property are sdlt ( paid by recipients at registration of title ) and liability to capital gains tax ( paid by the donators ).

    For a transfer of property by gift and no mortgage , there is no sdlt to pay.

    For a gift to a third party , there is liability for cgt

    For a transfer between spouses or between civil partners , there should be no cgt to pay.


    So you should check with HMRC regarding recognition of legislation for mixed sex civil partners as mentioned in Post 2.

    And ask HMRC hotline if a transfer between mixed sex civil partners is treated same as between married spouses. ie. no cgt
    Although giving a property away is a disposal for CGT purposes I assume in this case the property has been the donors' main residence for the time they have owned it so in this case CGT won't apply.

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  • Gordon999
    replied
    The 2 types of tax to clarify before making a transfer of property are sdlt ( paid by recipients at registration of title ) and liability to capital gains tax ( paid by the donators ).

    For a transfer of property by gift and no mortgage , there is no sdlt to pay.

    For a gift to a third party , there is liability for cgt

    For a transfer between spouses or between civil partners , there should be no cgt to pay.


    So you should check with HMRC regarding recognition of legislation for mixed sex civil partners as mentioned in Post 2.

    And ask HMRC hotline if a transfer between mixed sex civil partners is treated same as between married spouses. ie. no cgt

    Leave a comment:


  • Phyllis
    replied
    Thank you again. And for the lead on the helpline!

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  • jpkeates
    replied
    Originally posted by Phyllis View Post
    Thank you both. Yes, I am following the Civil Partnership changes. Also, thank you for reassurance. For some reason, doing this does not sit well with me but I can’t find any reason so will just accept I’m worrying for no reason. Thanks again.
    It's probably just because it's unusual.
    There aren't many occasions in life where someone is simply given something so valuable, and it feels as if there should be some compensatory downside.

    HMRC have a help line if you want a second opinion, but I think your solicitor sounds correct to me.

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  • Phyllis
    replied
    Thank you both. Yes, I am following the Civil Partnership changes. Also, thank you for reassurance. For some reason, doing this does not sit well with me but I can’t find any reason so will just accept I’m worrying for no reason. Thanks again.

    Leave a comment:


  • jpkeates
    replied
    If there's no mortgage involved, this is simply a gift.
    There are rules about gifts designed to prevent tax avoidance, but a genuine one-off but generous gift is perfectly fine and would be tax-free.

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  • midlandslandlord
    replied
    I suggest Plan B.

    Unless I have it wrong, you will soon have the right to become a mixed-sex Civil Partnership.

    http://equalcivilpartnerships.org.uk...sent-received/

    That is enabling legislation. The Govt now need to implement the Regulations, which seems to be due by the end of the year.

    Congratulations !

    (I think, and assuming this is England)

    ML

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