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bigduckontax
bigduckontax, Accountant
Category: Tax
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To my previous question just to completely

Customer Question

In follow up to my previous question just to completely clarify. My daughter can earn rent from a spare room up to £7.5K / year. Any money above this would be interest on the loan and hence subject to my income tax liability. Also, if I loaned the money to both my son and daughter so they are both registered owners is it possible in the future to transfer the ownership to either one? i.e. re-register in one name. Is this a simple transfer or is there a tax liability?
Submitted: 7 months ago.
Category: Tax
Expert:  bigduckontax replied 7 months ago.
No it would not, it would be her income from renting a room; nothing to do with you. What she pays to you and how she does it to clear her loan is outside the scope of UK taxation unless she pays you interest on the loan over and above capital repayments. Were daughter and son to own as Joint Tenants then the Rent a Room Allowance is halved ie 3750 each.
Customer: replied 7 months ago.
Ok thanks if both son and daughter are both registered owners is it possible in the future to transfer ownership to either one? i.e. re-register in one name. Is this a simple transfer of title or is there a tax liability (i.e. any stamp duty to be paid?)
Expert:  bigduckontax replied 7 months ago.
Transfer can most easily and economically be accomplished by means of a Land Registry transfer, assuming that the house is so registered. There will be no tax liability on the sibling making the transfer unless Private Residence Relief fails if it is not their sole or main domestic residence. Stamp Duty Land Tax (SDLT) is paid by the buyer on the consideration; in this case there is none. in any event SDLT does not kick in until 125K so for a half share the residence would have to have a value in excess of 250K..
Customer: replied 7 months ago.
Ok so the 'buyer' would pay stamp duty on the 50% of the property transferred and the rate paid depends on the property value. BUT how is this determined at this time, is it at the value of the initial purchase price or how is the new value determined if say this is done in 5 years time. Thanks for your answers!
Expert:  bigduckontax replied 7 months ago.
Here the Valuation Office Agency (VOA) would come into play. This is a part of HMRC staffed by Chartered Surveyors whose main task is setting Council Tax Bands and rateable values for business rates. However, they are also advised of any transactions in landed property and thus have a very comprehensive data bank of current and historic land values. Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 7 months ago.
I guess this will be the current market rate at the time? or slightly under?
Customer: replied 7 months ago.
On to another question; is it possible to claim nursing care costs off tax?
Expert:  bigduckontax replied 7 months ago.
Yes, the current market value. Have a look here for some advice on nursing costs. They are not allowable against tax, but sometimes the local authority can help: http://www.telegraph.co.uk/finance/personalfinance/7807967/Cut-the-cost-of-nursing-home-care.html This is an entirely different question and should have been the subject of a separate question!
Customer: replied 7 months ago.
Ok leave the nursing question for now. I will raise a separate question.
Back to the stamp duty question. If the person receiving the registered property ownership receives it as a gift then is stamp duty still due?
Expert:  bigduckontax replied 7 months ago.
Here is the advice from the Gov UK web site on the matter: 'If the transfer is a gift If the transfer is a gift and there’s no consideration, SDLT doesn’t normally apply.' Better than a poke in the eye with the proverbial sharp stick.

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