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Where Taxpayers and Advisers Meet

Gifting portion of property

Glegg
Posts:3
Joined:Tue Oct 09, 2018 4:10 pm
Gifting portion of property

Postby Glegg » Tue Oct 09, 2018 4:16 pm

I currently own 50 per cent of the property my mother lives in (property 1) She is about to move to a retirement property (property 2). Does it make sense for her to gift me her portion of property 1,so that she is exempt from higher rate SDLT on the purchase of property 2? Property 2 would be bought in my mother's name, but paid for jointly by me and my partner, probably before sale of property 1. Grateful for any advice!

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Gifting portion of property

Postby maths » Mon Oct 15, 2018 7:26 pm

If mother lives in Property 1 (which she half owns) then the 3% SDLT charge will not be payable on her new home purchase if she gave her 50% to you as you suggest.

Her gift is a disposal for CGT but no such charge should arise if she has always lived in the property.

If Property 2 purchased before sale of Property 1 then 3% will be payable but recoverable.

It's not, however, clear who will own the beneficial interest in Property 2 as you/husband are financing it.

If you/husband own the beneficial interest then you will be exposed to a 3% charge.

If mother owns the beneficial interest either you are gifting the purchase monies to her or are loaning her the monies.

Martintaxes
Posts:37
Joined:Fri Apr 28, 2017 12:25 pm

Re: Gifting portion of property

Postby Martintaxes » Wed Nov 21, 2018 10:26 pm

Interesting outcome!

Not quite the same thing, but if I left my family home for work reasons and bought another house to live in, Id have to pay second home stamp duty. However, can I claim the extra duty portion back if the original main home then sold, say 2 years later, and the family joined me and the second home became our main residence?
Many thanks, and sorry to hijackcthe thread!
Martin.


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