Thank you for your question.
If your son is the only owner of the property then there is no extra stamp duty to pay as the property would be registered in his name and also this being his first residential property, extra stamp duty is not applicable.
You could draw a legally binding agreement that he would return the initial capital outlay on the sale of the property. As far as the gain on sale is concerned he could gift you that sum.
IHT implications -
If you loan him the amount, then it remains part of your estate for IHT purposes and the 7 year IHT rules don't apply. If you gift him the money, then it is treated as a potentially exempt transfer and 7 year rule applies.
If your son gifts you what is the eventual profit on sale of property, then it would be a PET for his IHT purposes.
If your son lives in the property throughout the period of ownership, any gain made on sale of it would be exempt from CGT as it would be covered by private residence relief. AS the property would be in his name I have covered how you should handle the transfers in a tax efficient way.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Thank you for your reply.
Whether he gifts you the profit on sale or the sale proceeds, the amount would be deemed a potentially exempt transfer as far as his wealth goes for IHT purposes. He would be gifting you the sum and if he survives for 7 year from from the date of the gift, then the amount concerned would be out of scope of IHT.. the same way as you gifting him the amount to purchase the property in the first place.
I hope this is helpful..
PET stands for potentially exempt transfer
Thank you for your question..
Granting of a loan and a repayment of it has no tax implications as it is movement of capital without a gain and it is not considered a gift.
I hope this is helpful.
Arif, thanks for your reply.
You have summarised the plan well.
If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.
Thank you for accepting my answer.