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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13864
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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would you please let me know the tax implications for my son

Resolved Question:

would you please let me know the tax implications for my son of the following;
1. I transferred a a flat worth £350k to him in March 2014.
2. I gave him £100k towards a flat he has bought and lent him £150k in August 2014. He is repaying the £150k on a monthly basis at current mortgage rates.
thank you,
Mike McCrory
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi Mike
Thanks for your question, I am Sam and I am one of the UK tax experts here on just Answer.
Regarding what you advise
1) the flat you transferred to him in March 2014, does this generate rental income, if, so he should declare this to HMRC, as this will have a tax implication, and the only other consideration he would have, would be capital gains if he sold this flat in the future.
You would have had a capital gain position when transferring this property to him - if this was not your main residence, If it your main residence, then you must make sure you are paying him market value rents, to avoid tax and IHT (Inheritance tax) pitfalls yourself, and again this rental income would need to be declared to HMRC
2) The gift of £100K has no tax implication on your son, none does the loan of £150K, as he is paying this back to you, Again there is just your tax and IHT position to consider.
Let me know if you have any follow up questions on your sons position.
Thanks
Sam
Customer: replied 2 years ago.

Dear *****,

thanks for the quick response.

Re the £350k flat, does he have any tax implication?

best regards

Mike

Expert:  Sam replied 2 years ago.
HI Mike
Thanks for your response
I have advised on this at item 1 -
1) the flat you transferred to him in March 2014, does this generate rental income, if, so he should declare this to HMRC, as this will have a tax implication, and the only other consideration he would have, would be capital gains if he sold this flat in the future.
You would have had a capital gain position when transferring this property to him - if this was not your main residence, If it your main residence, then you must make sure you are paying him market value rents, to avoid tax and IHT (Inheritance tax) pitfalls yourself, and again this rental income would need to be declared to HMRC
Thanks
Sam
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