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wingrovebuyer
wingrovebuyer, Senior Solicitor
Category: Property Law
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Experience:  Bachelor of Laws (Honours); PG Diploma in Law; Member of ALA; 9 years' experience
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Our daughter is in private education. My husband and I would

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Our daughter is in private education. My husband and I would like to set up an education trust for her where from at least part of the school fees to be paid. We have a rental property (we used to live there for 7 years) where there are 30,000 left on the mortgage. We can now release equity and pay this mortgage and then make a gift this property(value 125,000-130,000, rent 700pcm) to our 8 years old daughter. The rent from the property would cover about half of her school fees. Would she be the legal owner of the property before she is 18 years old and having her own tax return or we have to sell the property to her grandparents and then they have to give it to her as a gift?
Submitted: 3 years ago.
Category: Property Law
Expert:  Stuart J replied 3 years ago.
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Do you intend to hold it on trust for your daughter?
Customer: replied 3 years ago.

We have not set up the trust yet. We are considering this if this is the only way to transfer the ownership of the property from us to her.

Expert:  Stuart J replied 3 years ago.





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Expert:  Nicola-mod replied 3 years ago.
Hello,

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.

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Customer: replied 3 years ago.


Thanks Nicola. I am happy to wait a bit longer.

Expert:  Nicola-mod replied 3 years ago.
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Nicola
Customer: replied 3 years ago.
Relist: Other.
The Expert opt out and I am still waiting for an answer.
Expert:  wingrovebuyer replied 3 years ago.
Hello. I'll pick this up. If you want to transfer the property direct to you daughter, I'm afraid this is not possible until she is 18. This is because under 18s can't own property unless it is as the beneficiary of a trust. To do what you want, you need to set up a trust to take ownership of the property, and to take on the mortgage liabilities.
Expert:  wingrovebuyer replied 3 years ago.
Helo. If I've answered your question fully, please don't forget to leave a rating. If you don't, the site keeps your money but doesn't pay me for assisting you. Thanks, WB.
wingrovebuyer, Senior Solicitor
Category: Property Law
Satisfied Customers: 737
Experience: Bachelor of Laws (Honours); PG Diploma in Law; Member of ALA; 9 years' experience
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Customer: replied 3 years ago.


Hello. Sorry I was away for the weekend. In case my husband and I set up the trust and the child is beneficiary than the property income will go on our tax returns and not on her tax return i.e. large proportion of the rental income will go to pay our taxes instead of paying her education. In case we sell/gift the property to her granddad than he can setup the trust for her and the rental income will go on her tax return not ours. Can you please advise if there are any other downsides as we need to choose which way the property goes to the child so she can have a maximum benefit from the property?

Expert:  wingrovebuyer replied 3 years ago.
Hello. Is is really a question for your accountant, but any sale gift or other disposal to your father etc might attract capital gains tax if the equity is over the personal allowance for CGT.

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