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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have just paid off my commercial mortgage to a freehold

Resolved Question:

I have just paid off my commercial mortgage to a freehold property and will be using it with my niece as my main residence. Having reached 60 this year, so I am planning my retirement!
If I gift deed it to Ruth now and live 7 years more, there is no inheritance tax for her to pay as I understand.
Ruth is only 26 and has no wish to buy a property so this is a pure gift for her as she helps look after her partially-sighted mum ( my sister is registered p-b).
Do I need to worry about capital gains tax?
I work as a professional live-in carer so have not had to have my own house to live in. I will do now as I plan my retirement.
Thank you.
Submitted: 6 months ago.
Category: Tax
Expert:  Sam replied 6 months ago.

HI

Thanks for your question - I am Sam and I am one of the Uk tax experts here on just Answer.

Can you advsie

1) When did you purchase the property

2) When did it first cease to be your main residence so you could become a live in carer

3) Did you then rent the property out - or leave it empty so you could move back in when your were between jobs

4) Will you, your niece and your sister all live here when you retire

5) Will you pay her rental income to remain living there

Thanks

Sam

Customer: replied 6 months ago.
Dear *****
As soon as I finish my four weeks stint here I will get my hands on the information you want.Sorry for the delay.Debbie Tan
Expert:  Sam replied 6 months ago.

Hi Debbie

Thanks for the update

Sam

Customer: replied 5 months ago.
This question is not closed by me.
Please reopen. Thanks
Expert:  Sam replied 5 months ago.

HI

It is open as you have just added this response to it ? But after so many days if there has been no activity on a question then you are sent notifications automatically by Just Answer.

Do you now have the information asked for ?

Thanks

Sam

Expert:  Sam replied 5 months ago.

HI Debbie

I have requested that your duplicate question be closed and if you wish a telephone call then I will have to send you an additional services request, which I am afraid then incurs an additional fee- would you like me to activate this telephone call ( I cannot call you directly its all managed through just Answer)

My answers in respect to the questions Sam put to me below.

(1). I purchased the property 30/1/2001. Prior to that I lived there for two years as a joint owner with Ms Mari Hirano.
(2) and (3) I ceased living there and rented it out 25/5/2006
(4). In the future, I plan to be looking after my mother with Alzheimer's in her house.
(5). And will not be paying rent to my niece.

Debbie Tan
PS please call me on***********- thank you Sam

Customer: replied 5 months ago.
Yep I just wrote it all out in a new question!Answers again here.I bought in 31/01/2001. Prior to that I do owned it for two years and lived there also.
I rented it out from 25/5/2006.
In the future I plan to live with mum as she has Alzheimer's
So, I will not pay rent to my nieceDebs
Expert:  Sam replied 5 months ago.

Hi

You need to use the original thread please

Thanks

Sam

Expert:  Sam replied 5 months ago.

So do you wish a phone call as I have sent a request from this thread?

Thanks

Sam

Customer: replied 5 months ago.
Correction "co-owned it ...
Customer: replied 5 months ago.
Not now I am a member and just paid a subscription of 51£��
Expert:  Sam replied 5 months ago.

Hi

We are still using your original thread for this topic - I have just asked for your new post to be closed - we will continue on this thread if thats acceptable and you will also then have been charged for this question and the subscription

Thanks

Sam

Expert:  Sam replied 5 months ago.

Hi

So can you advsie the following

Did you live in as a carer from 25/05/2006 until now (as your retirement looms)

Do you plan to live at all in this property with your niece as you now advise you will go and live with your mother

Will you spend any time at all living there in the future or will you view this then as Ruths home

Thanks

Sam

Customer: replied 5 months ago.
Sam, I will return later for your answer?I am investigating via lawyers if it would be simpler and better for me to just will it to my niece.
Expert:  Sam replied 5 months ago.

I have replied and I need more information

Thanks

Sam

Expert:  Sam replied 5 months ago.

I asked

Did you live in as a carer from 25/05/2006 until now (as your retirement looms)

Do you plan to live at all in this property with your niece as you now advise you will go and live with your mother

Will you spend any time at all living there in the future or will you view this then as Ruths home

Thanks

Sam

Customer: replied 5 months ago.
I became a professional carer in 2012.
I have been a self employed driving instructor till 2008 and I lived in Newham for two years , not at the property I am giving to my niece.I am now at the property in question as my main residence.
My mother is needing taking care 100% of the time so I think it is better I give my niece charge of the house.
Sin
Expert:  Sam replied 5 months ago.

Hi

I am sorry but this is not helping me advsie you

You advised that you ceased living at this specific property from 25/05/2006 so you live din Newham from then until 2008 when you ceased being a driving instructor

Who lived in the property from 2006 to 2008

Where were you from 2008 to 2012 when you started being a live in carer

Did you rent the property out to tenants at all - if so did you declare rental income to HMRC

Are you now at this property as its a gap between your break working as a carer which started in 2012

When are you due to retire

When will you go and live with Mum

Where does your niece live now ?

If you do not transfer the property into her name - will she pay all the bills

If you do transfer the property into her name - will you continue to make sue of it?

Thanks

Sam

When will you move in with your mother

Customer: replied 5 months ago.
Up till now, in between caring jobs I stay with my sister.
Debbie
Customer: replied 5 months ago.
As a professional carer yes "I live in".
Expert:  Sam replied 5 months ago.

Hi

Could you answer all the questions please - I am trying to establish your tax position with this property

Hi I am sorry but this is not helping me advsie you You advised that you ceased living at this specific property from 25/05/2006 so you live din Newham from then until 2008 when you ceased being a driving instructorWho lived in the property from 2006 to 2008Where were you from 2008 to 2012 when you started being a live in carerDid you rent the property out to tenants at all - if so did you declare rental income to HMRC Are you now at this property as its a gap between your break working as a carer which started in 2012When are you due to retireWhen will you go and live with MumWhere does your niece live now ?If you do not transfer the property into her name - will she pay all the billsIf you do transfer the property into her name - will you continue to make use of it?

Thanks

Sam

Customer: replied 5 months ago.
2006 to 2008 I was living in Newham.
And from 2006 the property has been rented out. And I declare rent to HMRC yes.
Ruth my niece lives there now. And she pays the outgoings.
I travel two to three times to Singapore where mum lives to take care of her.
When I do transfer the property to Ruth I will occasionally stay with her.
Customer: replied 5 months ago.
oh as I am still working I stay at clients houses.
Expert:  Sam replied 5 months ago.

Hi

Thanks

Then if you gift the property to Ruth you will have capital gains tax to pay as this has ceased to be your home for various periods of time and also note that if you gift this property to Ruth you cannot then make use of it - you can say occasionally (say 2- 3 weeks a year) but anything more will then negate the Inheritance tax position.

This would mean instead of it being disregarded for Inheritance tax after 7 years (potentially exempt transfer) , it would treated as a gift with reservation of benefit - so still be included as part of your estate

The capital gain position would arise as its been more than 4 years since this has been your main residence (which is the maximum for working away) and you had time from 2006 to 2008 and 2012 to date and then you have times in between jobs when you have not returned to the property as you let it out - so whilst you will be entitled to tax reliefs (private residence relief and private lettings relief (as you declared rents to HMRC) you will have I suspect some tax to pay even though you will just be gifting the property - and not selling it ..

It maybe that the best way forward is to just bequeath the property to Ruth through your will, because if the value of this property and all your other assets are less than £325,000 then you will have NIL Inheritance tax to pay anyway.

But do take that advsie from solicitors, as I am sure you can appreciate we are UK tax experts and not legal experts ! Let em know if I can assist further, but if you have ll you need, it would be appreciated if you could rate me for the level of service I have provided (or click accept)

I hope that helps you

Sam, Accountant
Category: Tax
Satisfied Customers: 13772
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Customer: replied 5 months ago.
Thank you for now. Yes I will return if necessary after consulting lawyers Debbie

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