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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
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If my mother buys a house and puts it in my name, will I incur

Customer Question

If my mother buys a house and puts it in my name, will I incur any tax charges? Would it be classed as a gift?
Submitted: 4 years ago.
Category: Law
Expert:  Stuart J replied 4 years ago.
Is she buying it as a gift?
Customer: replied 4 years ago.

Not for me to live in, just to inherit one day.

Expert:  Stuart J replied 4 years ago.

Is this anything to do with avoiding care fees?

Why doesnt she just give it to you now?

We do need full background thinking please. Do you have another house?

Customer: replied 4 years ago.

Nothing to do with avoiding care fees. She is a housing association tenant and retired then sold a property she owned in France and wants to invest. I own no properties in the UK. She thinks if she puts it in my name she won't lose her secure tenancy.

Expert:  Stuart J replied 4 years ago.

So why doesnt she simply give it to you?

Is ita condition of her tenancy that she doesnt own another house?

Customer: replied 4 years ago.

We haven't considered that. When you say give it to me, do you mean the money or the house? I wasn't sure if gifts that large were taxable. She hasn't enquired properly but a housing officer said previously that housing association tenants don't have a right to social housing if they can demonstrate enough savings to buy their own property.

Expert:  Stuart J replied 4 years ago.




She is between a rock and a hard place. If she asks the
housing association, they are likely to say that she has enough money to buy
our own house, so no longer qualifies.

If she gives the money away, she has deprived herself of
capital, which is technically fraudulent on the housing association if that is the criteria.



The idea behind social housing is this it is provided for
people who do not have enough money to buy a house of their own and therefore,
the house that she is in is depriving somebody else of a house who is eligible.



Of course, they may never find out but I cannot tell you
to hide it.



She can make any gifts she likes to you and for tax
purposes, once you have had it the seven years, it is free of inheritance tax.
It is also free of income tax and capital gains tax liability by you. If her
estate, when she dies, is under 325,000, there is no inheritance tax,
regardless of when the gift was made.



If the money is used to buy a house, and he is not your
prime residence, you are liable for capital gains tax when you sell it.



Leaving the housing association out of it, if she simply
buys a house for you and put it in your name, you are free to s sell the house
and spend, gamble, waste the money, as you wish. She loses control.



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Customer: replied 4 years ago.

Just read tenancy agreement document. Only says you have to use the association property as main residence. No other details.


 


Many thanks, can now go over our options a little more informed.

Expert:  Stuart J replied 4 years ago.
If I were her I would make discreet enquiries about what she was told then. It may be that she didnt declare capital in the French property when she moved into the HA property
Customer: replied 4 years ago.

Yes. She's a former council tenant, french property not bought until two years into HA tenancy and very small sums involved, barely 20k.

Expert:  Stuart J replied 4 years ago.
Thanks. I would make discreet enquiries about capital requirements if I were her, just to be sure.