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I am selling my house to my daughter and her partner because

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I am selling my house to my daughter and her partner because it is suitable for his serious disability of MND. They cannot afford to buy it outright and I cannot afford to buy another house. So I will rent a flat and they will pay me a monthly amount sufficient to cover the rent. After 20 years the house debt would be paid off, but may be paid off earlier if their financial position improves. I have no savings except for ISA's to value of under £6,000, and I presently pay annual tax of approximately £1,500 on my teacher's pension and social security. My question is this: will the money they give me to cover my rent increase my tax bill? Thank you. Janet Rutherford
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi Janet
Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.
Will the property will remain legally yours until such time it is paid off, or do you plan to transfer the property into their names now, and in essence loan them the value of the house (so they will have the asset of the property rather than hard cash) and will the money they pay you be loan repayments - and will their be any interest paid on top of the loan repayment
(it makes no difference if you then use the money to pay your rent as this has no bearing on the tax position)
Thanks
Sam
Customer: replied 2 years ago.

I plan to transfer the property into their names now.

The money they pay me monthly will be loan repaymernts .

I will not be charging them interest.

Expert:  Sam replied 2 years ago.
Hi Janet
Thanks for your responses
Then as long as the contract is drawn up as a loan contract - then you will not be liable to tax on this money, as its just reimbursing you for the properties value over a set period of time.
Only if there was interest being paid, would there be a tax position to consider, as the interest element would be treated as liable to tax.
And as its your main home, then no capital gains (as you will transfer it into their names straight away, so the property is covered by private residence relief, and no Inheritance tax as they are to buy the property - but if they still owe money at the time of your passing, then this outstanding debt would be asked for by the estate (so make sure you cover this factor into your will)
Let me know if you have any follow up questions on the information I have provided,
Thanks
Sam
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Category: Tax
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