CGT or letting my house to parents?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    #16
    Originally posted by ncooper1974 View Post
    I think i'm writing some posts in this thread based on opinion (mine) rather than fact, and for that i do apologise. like i say, i do need to seek professional advice....
    admittedly, i thought that if i gifted my house to my parents, and when i say gifted i mean transfer the title from my name to their name, then i would have to pay SDLT - but from what you say jeffrey this is not true?
    Again (and have the cows come home, yet?):

    TRANSFER BY GIFT (i.e. not in exchange for £££ or anything else) = NO SDLT.

    Please write-out x100 (and see me after school if you still don't understand).
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #17
      SDLT is payable at 0% on transactions up to 125,000. So yes, you can sell it to them for 100k.

      (I suggested the loan to take it to 250k as you wanted to be able to take £400 per month from them without paying tax. It also leaves you owning a significant chunk of their assets if IHT rules change in the future, but not of their house, so any future gains are CGT free.)

      ___________________

      Edited thank you Jeffrey.
      The contents of this note are neither advice nor a definitive answer. If you plan to rely on this, you should pay somebody for proper advice.

      Comment


        #18
        Er, it's £125 000 (or £150 000 in disadvantaged areas). The zero-rate applies up to and including the figure shown.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #19
          I've just had a long chat to a tax consultant/advisor, and he thinks (like you probably all do) that i'm being over complicated and want to cover too many basis.

          i also had an amusing chat with a solicitor last night saying i wanted to gift my parents my house, and he said its usually the other way round!

          anway, i think the best way ahead for me in this situation is to keep the house in my name. I'll let my parents move in and draw up an agreement (see later in post). in return they will gift me £100k that i can use as a deposit for my new house. When they pass away, I'll then sell the house, and pay the CGT on whatever profit (less allowable expenses) that I make.

          my 2 new questions therefore are:
          1) what tenancy agreement can i give my parents. I want to give them security of tenure, and so want something that says they can live there for as long as they like, and not pay any rent.
          2) if i'm not charging them rent (dont think its fair as they are giving me £100k up front) then would i still be allowed to offset any maintenance and repair costs in my self assessments?

          Comment


            #20
            Re question 1: what about a lease 'for life'? This would:
            a. be a non-assignable leasehold;
            b. reserve only a peppercorn rent;
            c. create for a term of 90 years; and
            d. include the right for you to terminate after the death of the survivor of them.
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


              #21
              2) if i'm not charging them rent (dont think its fair as they are giving me £100k up front) then would i still be allowed to offset any maintenance and repair costs in my self assessments?
              http://www.wealthandtrustee.co.uk/im.../march2007.pdf

              See page 6.
              where a property is let at a rate that is less than the
              market rate they permit expenses to be deducted up to the value of the rent. This means that the expenses cannot create losses and excess expenses cannot be carried forward to be used in later years or set against the income from other properties in the rental business. If expenses exceed the rent for a property that is uncommercially let, the result is that the property produces neither a profit nor a loss. No relief is given for the excess expenses.
              The contents of this note are neither advice nor a definitive answer. If you plan to rely on this, you should pay somebody for proper advice.

              Comment


                #22
                Once again - thanks to you both for your reply.

                Looks like i'll be giving them a lease for life then.

                I only asked the question about the expenses as I have other properties which i claim allowances for, and didn't know how to treat this new one. Seems pretty clear cut to me!

                Comment

                Latest Activity

                Collapse

                • New to Renting out my property - Some tax questions
                  by mucker973
                  Hi All,
                  I have a property I used to manage myself. The tenant paid me directly and I never declared it with the taxman. Going forward I have decided to use a letting agent to manage all of this. I currently reside abroad and when filling in the forms there is question which essentially is asking...
                  24-06-2022, 07:39 AM
                • Reply to New to Renting out my property - Some tax questions
                  by DoricPixie
                  Your tax situation in Australian depends on whether you’re a permanent resident/citizen or a temporary resident. If you’re a temporary resident you find yourself in tax sweet spot where HMRC doesn’t care about your Australian income and assets and the ATO doesn’t care about your UK income and...
                  24-06-2022, 14:29 PM
                • Reply to New to Renting out my property - Some tax questions
                  by Gordon999
                  If you are living overseas, you must register as a non-resident landlord using NRL1 form to Tax Office if you receive rental income from a UK property. If you don't register , the letting agent is required to deduct 25% tax on any rental money paid to you.

                  After being registered...
                  24-06-2022, 09:31 AM
                • Reply to New to Renting out my property - Some tax questions
                  by jpkeates
                  https://www.gov.uk/government/public...g-a-disclosure

                  There's a "not quite an amnesty" operating at the moment.
                  24-06-2022, 09:02 AM
                • Reply to New to Renting out my property - Some tax questions
                  by mucker973
                  Thanks JPkeates, I knew you'd know!

                  I've been thinking of reporting it for a while. If I declare these past "earnings" do you think I'll just have to pay the tax (if there is any) or do you think there will be any penalties? Penalties are usually applied when you are caught out...
                  24-06-2022, 08:47 AM
                • Reply to New to Renting out my property - Some tax questions
                  by jpkeates
                  I don't know what the situation is with Australian tax on UK rented property, and you'd probably better enquire locally.

                  There are two different things to address.
                  If you've been receiving income and not declaring it, you need to own up and pay what you owe - which sounds like nothing...
                  24-06-2022, 08:32 AM
                • Reply to New to Renting out my property - Some tax questions
                  by Covent Garden Girl
                  Your questions are more complicated than you imagine.

                  1) Yes, firstly as a non resident landlord, the agent or indeed tenants have to deduct tax at source, or you have to send off a form, but also wait for HMRC to send confirmation that they think it is okay for you not to have the tax...
                  24-06-2022, 08:17 AM
                • Are utility bills tax-deductible?
                  by Bigpat
                  I've had a buy-to-let on a standard Assured Shorthold Tenancy for a few years and my tax return has been pretty simple. But since last year I have also had two lodgers, staying with me at my own residential property. Now I have purchased a small additional property, which I have moved into myself and...
                  21-06-2022, 14:26 PM
                • Reply to Are utility bills tax-deductible?
                  by jpkeates
                  Even if you don’t need a licence, managing an HMO can be quite onerous. You’ll need a fire risk assessment, and then to comply with its requirements as a first step.

                  That usually means fire retardant doors, different door locks, hard wired fire and smoke and heat alarms for a start....
                  24-06-2022, 07:08 AM
                • Reply to Are utility bills tax-deductible?
                  by Bigpat
                  Thanks. Yes I checked the local authority who said that only "large" HMOs have to be licensed, and that counts as 5 or more tenants.

                  I had no idea that separate TV licences would be required. How do HMO landlords usually handle this?
                  (a) should I purchase three additional...
                  23-06-2022, 21:38 PM
                Working...
                X