Postby AGoodman » Mon Feb 06, 2017 12:41 pm
There is probably little point in the gift and it could theoretically make things worse.
You mother will have a nil rate band of £325k and, if she leaves the house to you, a residential nil rate band (RNRB) of £100-175k (the former from April this year, the latter assuming she survives past April 2020).
She also receives a transfer of your father's NRB of £325k and RNRB of £100k, a grand total of £925k tax free.
With that in mind, there is no need to make any transfers. Bear in mind that if she continues to live there, the half share will remain part of her taxable estate anyway under the gift with reservation rules.
If she does make a gift, you should ensure that she retains £275k of the home to pass to you to ensure she benefits from the full RNRB.
There is no CGT on a gift as your mother benefits from 100% principal private residence relief. You should also benefit from that if you later come to sell the half share. The slight quirk is that if you mother retains the entire house until death, it will benefit from a capital gains tax uplift to market value. This is unlikely to make a difference in practice.
I'm no conveyancer but if you do want to proceed with a gift, there are two ways to arrange it. She could execute a simple declaration of trust under which she declares herself a trustee of the property as to one half for her and one half for you. This is not registered. Alternatively, she could make a formal transfer of the registered title to her and you as tenants in common.
I would recommend using a solicitor but you should be able to arrange it for far less than £1,200 - most high street firms would buy or sell the property for less. The transfer form is a TR1 as she is transferring the entire property into your joint names (as tenants in common). The TP1 for a part transfer is only used if you are physically dividing the property - eg transferring the garden.
Andrew Goodman