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Where Taxpayers and Advisers Meet

2nd property gift

Bill31
Posts:50
Joined:Sun Jan 19, 2020 12:32 am
2nd property gift

Postby Bill31 » Thu Jun 04, 2020 10:19 pm

I thought this question best asked here.

In 2010 i bought a buy to let property my first ever purchase.
Me and my father have always lived in his house. He owns only 1 property. In 2016 he gifted that to me making us joint owners. The gift was for no money and theres no mortgage.

Now this gift he made to me of our main residence is counted as my 2nd property, because i still own the buy to let. Would i have to pay the additional 3% SDLT charge on the gifted property from my father, because its a 2nd property ? Or is there no sdlt to pay because of the gift for no money?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: 2nd property gift

Postby bd6759 » Fri Jun 05, 2020 12:59 pm

No consideration paid or assumed therefore SDLT is nil.

(The additional 3% would have applied had there been consideration).

Bill31
Posts:50
Joined:Sun Jan 19, 2020 12:32 am

Re: 2nd property gift

Postby Bill31 » Fri Jun 05, 2020 3:15 pm

Ok thanks.

Before my father gifted me the property in 2016, prior 2 years earlier he gave me 60k cash via a bank transfer. 28k of that was a cash gift and the other 32k was a loan, which we agreed verbally would be payable back within 2 years.

Now 3 months before the property was gifted i managed to give him back all the 32k over a period of a few months via bank transfer. Could hmrc argue that that i gave him this money in exchange for the part gift of the house?

Am i better of just saying he gifted me money then i gifted it back to him rather than a loan? Im not sure how to structure this or if i even need to.
I dont want hmrc coming back to me either sayin that money was for the gift of the house and maybe sdlt was due? Its just the loan was repaid very close to the time the house was gifted...

Appreciate peoples views on this...

Nicklam
Posts:44
Joined:Sun Jan 19, 2020 1:00 am

Re: 2nd property gift

Postby Nicklam » Fri Jun 05, 2020 6:08 pm

Im not to sure on this one but i have a go. Maybe other members like maths or someone can chime in.

The 60k was given to 2 years earlier in 2014. 32k as loan, 28k as gift.
The gift of house was given in 2016 and would have been for no money.

I think they are 2 separate scenarios as the loan was given well before 2 years of gift of house. Rather than verbally maybe you should have made a written document of the loan arrangement.
If you paid the 32k of the loan back to yr father lets say before you recieved gift of house, you could show via bank statement time of original loan and when loan was repaid.

I wait to read others members options. As i be interested to know how you would structure a loan that cant be seen as a gift

Nicklam
Posts:44
Joined:Sun Jan 19, 2020 1:00 am

Re: 2nd property gift

Postby Nicklam » Fri Jun 05, 2020 6:37 pm

Oh also wanted to add i think that the money repaid was less than the consideration of £40,000 but i think someone else can confirm.
Meaning the 32k you repaid as loan if it was connected to house is below the 40k threshold so your exempt from sdlt also. Lets see what the nore experienced members say

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: 2nd property gift

Postby bd6759 » Fri Jun 05, 2020 9:03 pm

I doubt HMRC would suggest that.

In any event, as noted, there is no SDLT unless the consideration exceeds 40,000.

Nicklam
Posts:44
Joined:Sun Jan 19, 2020 1:00 am

Re: 2nd property gift

Postby Nicklam » Fri Jun 05, 2020 9:45 pm

I doubt HMRC would suggest that.

In any event, as noted, there is no SDLT unless the consideration exceeds 40,000.
Ok thanks for clearing it up, it seems i have nothing to worry about. Ive had some bad experience with hmrc recently they are pure evil. I just want to make sure everything is in line and i cover myself now in future. As it seems they look for any reason to be harsh and unreasonable


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