Stamp duty & possible CGT

[Dev_1]

Hello,

Many thanks for finding the time to read this post.
I am not entirely sure if this is the correct group to post this enquiry.

Our family home at the time was owned outright by my mother.
She then changed the ownership to joint equal owners with me, no money changed hands.
We both continued to reside in the property till 2016.
We then both moved out & she now lives with me in another property which I own in my sole name.
The first property which is still owned together is currently rented.
I would like to transfer the property back into my mothers sole name which we joint own (rented property)

i would like to know will there be any stamp duty to pay if this transaction was made without any money changing hands.
I would also like to know would CGT be payable?.

We have our own reasons for doing this, i think my mother wanted to look after me before.
Now that I have got my own place i really do want to give her property back to her.

kind regards

[Dev_1]

Hello,

Sorry to be a pain I would be grateful if someone could help me with the above query.

Many thanks

[darthblingbling]

CGT and stamp duty may be liable yes. Potential inheritance tax issue as well.

On the instance of the initial transfer, your mother may be liable to CGT, however as it's her main residence this gain will likely be covered by PPR. You would have been liable to Stamp Duty if there was still any outstanding mortgage.

On the second transfer you may be liable to CGT, however as you resided in the property until 2016 and then rented it out, likely the gain will be covered by PPR and letting relief. Once again stamp duty may be an issue if there is any mortgage outstanding.

[maths]

Are you are referring to a transfer of legal ownership ie were you added to the legal title or did mother just transfer a beneficial interest in the property to you whilst retaining sole legal title?

[Dev_1]

Hello,

Many thanks for your reply.

In relation to the first transfer from sole names to joint owners where we both continued to reside in the property there was no mortgage on the property.
Even at this stage there is no mortgage on the property.

i was added to the legal title of the property & thats how it remains, its owned based on 50/50 % on land registry.

it has only been 15 months since we have both moved out of the property and it been on rent & would ideally like to resolve this issue soon.

Hope this information helps.

Kind regards

[maths]

No SDLT; no CGT.

[Dev_1]

Hi Maths,

Many thanks for your reply.

So just to confirm do i need to make this transfer within a set period of time i.e 18 months from moving out of the property or can it be done whenever without any CGT or SDLT being applicable?.

In regards to you saying that CGT will not be payable if i was to transfer my share back to my mother this is definitely good to hear can you please inform me of why this would not be applicable as this is now a rented property?.
I fully trust your advice & don't for any moment doubt what you are saying i just want to get it right in my own head.
Once again many thanks for your assistance.

Kind regards

[someone]

So just to confirm do i need to make this transfer within a set period of time i.e 18 months from moving out of the property or can it be done whenever without any CGT or SDLT being applicable?.

In regards to you saying that CGT will not be payable if i was to transfer my share back to my mother this is definitely good to hear can you please inform me of why this would not be applicable as this is now a rented property?.

The last 18 months are included in your PPR. So if you transfer it back within 18 months of it stopping being your sole or main residence then there's no CGT and no need to declare it on a tax return.

After 18 months there is potential CGT. However you will also be eligible for RLR so still no CGT. However, my understanding is that you will have to declare it on your tax return even though no tax is due becasue of the value of the asset.

Eventually the taxable gain will exceed the RLR allowance, so eventually there would be CGT to pay. That could be years, or even decades away depending on how long it was your PPR and how much the gain is.

If you're concerned about relying on comments on a free web forum (where you follow them at your own risk) you would do well to talk to an accountant. For a couple of hundred pounds (maybe less) they'll give you a detailed breakdown of what tax would be due and confirm everything in writing. Although I don't think it would affect the tax you would have to pay if they got it wrong, it would also mean that you almost certainly wouldn't be liable for any penalties (unless you lied to the accountant about the facts) and, in the worst case, you could probably sue the accountant if HMRC did decide to levy penalties later due to the incorrect tax having been paid.