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Where Taxpayers and Advisers Meet

Transferring property into sons name

Joined:Mon Nov 25, 2019 7:21 pm
Transferring property into sons name

Postby stephengraham » Mon Nov 25, 2019 7:33 pm

Hi all, my father would like to transfer one of his rental properties into my name.

What is the most efficient way to do this?

He has never lived in the property
Valued at about £300K with no mortgage.
What tax's etc will be due?

Should I also be transferring the property into the company rather than to me personally and should the company buy the house from my father?

Thank you in advance for the advice

Joined:Wed Feb 08, 2017 2:33 pm

Re: Transferring property into sons name

Postby AnthonyR » Tue Nov 26, 2019 8:54 am

If your father transfers the property to you as a gift then this will trigger capital gains tax on the gain since he has owned it, with tax at 18/28% (after annual exemption). If he does this before 6 April he will have until Jan 2021 to pay the tax, if he does it on or after 6 April he will have to pay within 30 days (new rules for residential property).

There should be no SDLT if there is no mortgage.

If he dies within 7 years it will remain in his estate.

If you buy the property from him at full market value, it will still trigger CGT, but also SDLT on the property. There's no 7 year survival period as there has been no gift (ie he now has £300k in cash rather than property).

If you then transfer the property into a company there's unlikely to be any CGT as you'll acquire it at market value. However, there would likely be an SDLT charge on the value of the property.

The alternative to consider could be for your father to place the property into trust, which would allow the CGT to be deferred, but has it's own complications.

You should seek some formal advice on the subject as it's a complicated area.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP

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