How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

May parents own a property that they own together and reside

Resolved Question:

Hi
may parents own a property that they own together and reside at. Currently have a outstanding mortgage of approx. £30k. They purchased the property in 1999 for approx. £95k. the current value is approx. £350k.
My Father is currently retired and my mother is not working as she is been signed off as medically unfit to work due to injury she suffered few years back.
what are the tax implications (inheritance, CGT, SDLT etc) if they gift the whole property to me?. as a mutual agreement, if they gift/transfer the property then I will have to pay off the outstanding mortgage of £30k they own to the mortgage lenders directly. in order to do that I'm borrowing from a lender who has agreed to pay that and they will have a charge on the property once it has been transferred to me.
regards
PV
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

Let me take a look at this and I'll get back to you.
Expert:  TonyTax replied 1 year ago.

Hi again.

CGT

Assuming the property has been your parents' main home since they bought it, the paper gain that will arise on any gift of it to you by them will be covered by the main residence exemption. Take a look at HS283 here for more information.

IHT

Assuming that your parents continue to live in the property after they gift it to you, it will be a gift with reservation of benefit and will remain in their respective estates until seven years after the reservation of benefit ends. If they die whilst still liviing there, then it will remain in their estates. Alternatively, they could avoid the reservation of benefit rules by paying you a market rent. Take a look for more information on gifts with reservation of benefit in IHTM04071 to IHTM04073 starting here.

In the worst case scenario, if your parents remain in the property for the rest of their lives, as well as IHT, there could be a CGT charge on you if you have to sell the house to pay the IHT. Regardless of the reservation of benefit, your cost for CGT purposes will be the value of the house when it is guifted to you. The IHT value could be significantly different.

SDLT

Where no cash is involved there is generally no SDLT. However, if you take on responsibility for the mortgage, ie it is transferred to you there will be SDLT if the value of that mortgage is more than £125,000 which isn't the case here. There should be no SDLT. Take a look here for information on SDLT and transfers.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and 2 other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions