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Ask Stuart J Your Own Question

Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 22564
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
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I want to give 50% of a property, valued at £500,000 to a friend.

Customer Question

I want to give 50% of a property, valued at £500,000 to a friend. How do i do this so that they do not incur any tax liabilty on the gift or should i die?

Submitted: 4 years ago.
Category: Law
Expert:  Stuart J replied 4 years ago.
Does the property have a mortgage?
Customer: replied 4 years ago.

No, no mortgage.

Expert:  Stuart J replied 4 years ago.

you continue to live in the property?

the person that you are giving the property to live in the property either?

we have the full background please? Thank you

Customer: replied 4 years ago.

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




Expert:  Stuart J replied 4 years ago.

you. 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.

transfer made during lifetime is a potentially exempt transfer, because if the
donor survives for seven years after making the gift, then it is tax free. In
the donor dies within seven years, then it is potentially liable for the full
inheritance tax rate in the first two years and then on a sliding scale or five
years thereafter down to nll after seven years.

that answer the question?

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The thread remains open for us to continue this exchange


Customer: replied 4 years ago.

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.

Expert:  Stuart J replied 4 years ago.

No problem.

The date of the transfer deed is the date of the transfer
of the tax purposes.

Any conveyancing solicitor can do a transfer deed
transferring the property from one name into two names. There is no mortgage
and 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 to
charge £300 or so

I am on and off all day so I'm happy to pick this up later.
Thank you

Customer: replied 4 years ago.

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?


thks again



Is this a common arrangement?

Expert:  Stuart J replied 4 years ago.

Almost. You don't need to give evidence via the solicitor
because the transfer deed and the date on it is evidence.

His children living in the flat makes no impact on the
inheritance tax situation, but you need to consider what happens if they
trashed the place, or will not move out. Do you want them to pay rent, et
cetera, et cetera. I would suggest that you gave them an assured short hold
tenancy, so that you have some statutory rights to boot them out if they do not
toe the line

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