Personal Loan Released in payment for part of house - Stamp Duty/IHT?

[DynaDons]

House purchased with loan from partner (unmarried, not civil partner) - house in my name alone.
Loan not secured on house.
House is rented out - not residence of either party.

IHT biggest concern.
Now think that would be better if partner owned part of house (as government keep changing rules on loans from connected people for IHT purposes - ownership would appear to provide more certainty - I suppose tax dept could contest a loan? Also loan becomes IHT problem for partner!).

House 550k
Loan 200k from partner

Would like to understand if we can convert the loan to part-ownership (easily) -- Can't quite work out the process of converting a loan to ownership...simple transfer TR1? Does any money have to actually change hands to make a 'sale'.

Is Stamp duty payable? (whole of the house value - OR just the part i.e. loan amount of 200k?) For partner - will be not be first or only house owned.

Not too concerned with Capital gains - probably minimal increase (maybe a decrease) due to being a recent purchase.

Thanks

[maths]

Not sure of the problem.

If the loan is properly documented between the parties then on the death of the borrower any outstanding liability would be deducted in ascertaining the value for IHT purposes of the deceased's estate.

For the lender, should he/she die, before repayment of the loan has occurred then the amount outstanding will form part of his/her estate for IHT purposes.

There is nothing to stop you agreeing with lender to give him/her a % beneficial interest in the property in exchange for lender forgiving the loan. SDLT would be due as the lender will be giving consideration for her % interest acquired.

CGT in principle in point.

[DynaDons]

Thanks Maths.

Ok pretty much as I thought. The problem that worries me - you never know what might change next - they very nearly stopped connected person loans altogether. They can't take away ownership (well I hope not!)

<<There is nothing to stop you agreeing with lender to give him/her a % beneficial interest in the property in exchange for lender forgiving the loan. SDLT would be due as the lender will be giving consideration for her % interest acquired.>>

Could you briefly outline the process to assign beneficial interest -- if I took it to a solicitor would they want to see money change hands (which would be difficult)?
i.e. How would we document that change to make it 'official'.
Assume SDLT would be the value of the loan/consideration - not full house amount?

<<CGT in principle in point.>>??
Assume you mean it would be better from a CGT point of view for lender to own their bit?

Thanks

[DynaDons]

Oh and BTW what constitutes 'properly documented' for the loan to be 'proper'?
Thanks