2nd Home Stamp Duty

[Gaebeck]

If I gift money to my daughter to buy a home costing £75000 rather than buy it myself I can avoid 2nd home stamp duty (she doesn't own a home).
The idea is that the house will actually the be bought by my son from my daughter as a first time buyer when he can arrange his mortgage. My daughter will then gift the money back to me when my son buys it from her.
I don't want to gift my son the money to buy the house as he would then have difficulty with lenders raising a mortgage on a propery which he would own, and have to pay remortgage rates rather than first time buyer rates.
My solicitor believes that this is legal and not tax evasion, but to check with a tax expert.
Can you advise please

[maths]

If you are making a gift to daughter why is she making a gift back to you (presumably of the same amount of similar) ?

Effectively you are providing the gift to daughter on the condition she buys a property and is then required to sell only to her brother and is then required to refund you the sale proceeds?

In the witness box this is presumably what would have to be admitted (assuming no party lies)?

[maths]

In short, if the obtaining of an SDLT advantage was a main purpose of the arrangements, the arrangements would be “abusive” and GAAR would apply.

[bd6759]

What will happen to the property if your son does not manage to obtain a loan?

[Gaebeck]

Bd6769. & maths
Whilst son is waiting to arrange mortgage to buy property he will be paying equivalent money to us that we would have earned in deposit interest. If he cannot arrange mortgage immediately this would continue until he can. Effectively the 'gift' is only temporary we are only lending the money to our daughter as we unfortunately are not wealthy enough to give any child an outright gift, otherwise we would have made the 'gift' directly to our son.

The 'gift', let us now say 'Loan', is only temporary and being made to daughter rather than son, as if made to him, would mean when he had to raise a mortgage in order to repay 'loan' back to us would mean he would have to be looking for remortgage rather than 1st time buyer rates.

The sole purpose of arrangement is as asked, to avoid 2nd home SDLT.
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For info, I did speak to HMRC Helpline and outlined proposed method and the advisor, whilst sounding somewhat vague, stipulated quite clearly that as our (wife and I) names will not appear as 'purchasers' (his wording) on any of purchase either daughter buying from vendors or son from daughter, no SDLT would be liable to us.

Any thoughts?
Gaebeck

[Gaebeck]

Sorry, forgot to ask,
What is GAAR

Gaebeck

[Gaebeck]

Just found GAAR and briefly read guidance document and I agree my proposed arrangements do appear contrived and I am in total honesty only proposing in order to avoid the 2nd home SDLT if it could have been possible.

Looks like I've got to pay the 3% (approx £2300).
But still; no need to involve daughter and possibly disadvantage her down the line if she wants to apply for a FTB mortgage.

Thanks for advice
Gaebeck