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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10585
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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where do we stand if we are gifted a property after paying

Resolved Question:

where do we stand if we are gifted a property after paying off the debt that has been has been left on it and let the person continue to live there. are there any tax implications do we have to take rent from her if so what is the minimum.
Submitted: 3 years ago.
Category: Law
Expert:  Aston Lawyer replied 3 years ago.
Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

Could you please give me a little more information-

How much did you pay to clear the debt?

Has a Solicitor acted for you in transferring the Deeds in the property to you at the Land Registry?

What have you and the occupier agreed as regards ***** *****? ie how long have you agreed to let her remain living in the property.

I look forward to hearing from you.

Kind Regards
AL
Customer: replied 3 years ago.

nothing has been done yet.


the debt is 31k on a 140k bungalow.


no solicitor involved at the moment.


occupier to live in property for the rest of her life. her age now 77.

Expert:  Aston Lawyer replied 3 years ago.

Hi Stephen,

Thanks for your reply.

If the owner is happy to transfer the property to you (she would have to take legal advice and instruct a Solicitor to prepare the Land Registry Transfer document), it is up to you and her to decide what sort of rights you wish to grant her. From her point of view, no doubt she will want to be granted a Tenancy for life, so she has security. If so, such a Tenancy can be prepared by your Solicitor.


There is no legal need for any tenancy to be granted but I am sure the occupier will want one and it would be best for you to have one in place so both parties know exactly where they stand.

From a tax point of view, there are no immediate tax implications from yours or her point of view. However, on the basis that you own another property already, if this new property is transferred to you, you would be liable for Capital Gains Tax when it is eventually sold, if the market value of it has increased from the day you have it transferred. (You would be deemed to acquire the property for its market value -£140,000).

I hope this assists and sets out the legal position to you.

Kind Regards
AL

Customer: replied 3 years ago.

what would the capital gain tax be ??

Expert:  Aston Lawyer replied 3 years ago.

Hi Stephen,

The Capital Gains Tax would depend on how much you eventually sold the property for.

The following Capital Gains Tax rates apply for the current tax year:
• 18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first )

So, if for example you acquired the property and it is valued at £140,000 and sold it for £200,000, you would have tax to pay on £60,000 at either 18% or 28%. You can deduct from the tax due your annual allowance which is presently £11,000.

I hope this clarifies things.

Kind Regards
AL


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