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Where Taxpayers and Advisers Meet

Gifting or selling BTL to sons

dotto
Posts: 49
Joined: Wed Aug 06, 2008 3:16 pm

Gifting or selling BTL to sons

Postby dotto » Sat Nov 10, 2018 1:20 pm

I am 70 yrs old and have owned a flat in a seaside town for 20 years, which I had intended retiring to. My buy to let mortgage term ended in March this year. I informed the lender that I was trying to sell the property and the lender increased the mortgage term by 12 months and increased the interest rate, still interest only, informing me that after the 12 months, and because of my age, the mortgage would take on repayment terms which would effectively double the repayments. Apart from an increase in the value of the flat from when it was purchased, I have received very little income from letting it and have recently spent a fairly large amount on new boiler and damp rectification. I have been unable to sell it, and even tried on-line auction. I am conscious of the 12 month deadline and am considering gifting the flat to my two sons - £83,000 btl mortgage - flat worth realistically £120,000 as it needs bringing up to date - altho the mortgage was based on a valuation of £137,500. We could raise the money for my sons to purchase the flat (by them obtaining a BTL mort), or I could presumably gift it to them, still with a BTL mort, to save some hassle, and hope I live for another 7 years. I am wondering iwhat tax implications this might have. My sons will not have any inheritance tax to pay when I die and any advice as to what I am proposing to do would be much appreciated.

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Gifting or selling BTL to sons

Postby bd6759 » Sat Nov 10, 2018 4:14 pm

The only tax implication with be capital gains tax when you dispose of it.

AGoodman
Posts: 909
Joined: Fri May 16, 2014 3:47 pm

Re: Gifting or selling BTL to sons

Postby AGoodman » Mon Nov 12, 2018 12:08 pm

More generally, gifting them the flat will not remove your mortgage liability - and the mortgage will prevent you from transferring it to them.

The only solutions appear to be to sell on the open market or sell to your children for a sufficient sum to pay off your mortgage. This may involve them taking out their own mortgage to raise sufficient funds.


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