No, no mortgage.
Willyou continue to live in the property?
Doesthe person that you are giving the property to live in the property either?
Canwe have the full background please? Thank you
I will not live in the property. My friend is going to let his daughter live in it. There is no morgage. I bought the property at the end of last year.
He is retired. I work.
We are concerned that there will be some tax lialbility on either or both of us. And/or, future inheritance tax should i die, or he dies within 7 years.
hope this of help
Thankyou. There is only a tax liability if either person leaves an estate worth over£325,000 to someone who is not a spouse or civil partner.
Atransfer made during lifetime is a potentially exempt transfer, because if thedonor survives for seven years after making the gift, then it is tax free. Inthe donor dies within seven years, then it is potentially liable for the fullinheritance tax rate in the first two years and then on a sliding scale or fiveyears thereafter down to nll after seven years.
Doesthat answer the question?
CanI help further?
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So far it is helping. I have to go to a meeting now and will click back on line later. IHT would apply.
meanwhile, what would I have to do? get a solicitor to draw up a document to cover the gift and to do the PET so that the seven years can start?
be back later.
The date of the transfer deed is the date of the transferof the tax purposes.
Any conveyancing solicitor can do a transfer deedtransferring the property from one name into two names. There is no mortgageand provided the person getting the benefit of the property is paying no money,then there is no stamp duty land tax to pay either. Expect a solicitor tocharge £300 or so
I am on and off all day so I'm happy to pick this up later.Thank you
Thanks again. so,I can gift 50% to the friend. No payment being made. No mortgage involved. We get a solicitor to draw up the land transfer. We consider it a PET and at same time we evidence the gift via a solicitor, so that the clock starts ticking down the seven years.Should i die in years 1-3 = full IHT, after that it drops 20% per year until 7th year when zero IHT applies.
Should my friend want one of his children to live in the flat, does that impact the transaction?
Is this a common arrangement?
Almost. You don't need to give evidence via the solicitorbecause the transfer deed and the date on it is evidence.
His children living in the flat makes no impact on theinheritance tax situation, but you need to consider what happens if theytrashed the place, or will not move out. Do you want them to pay rent, etcetera, et cetera. I would suggest that you gave them an assured short holdtenancy, so that you have some statutory rights to boot them out if they do nottoe the line