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TonyTax
TonyTax, Tax Consultant
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I have a relatively small mortgage and about to take out

Resolved Question:

Hi there, I have a relatively small mortgage and about to take out more on the same property (all within 50% of property value). I am intending to give out about 80-90% of this additional amount as a gift to my parents with the view of purchasing a property abroad. Would there be any complications, inc. tax?
Thanks and regards,
Katia.
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Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 1 year ago.

You will be making a gift for Inheritance Tax purposes which will remain in your estate for seven years after the date it is made. Should you die within that period, thre may be some IHT to pay but once the gift is over three years old, the potential liability tapers away as you will read here.

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

Expert:  TonyTax replied 1 year ago.

You will be making a gift for Inheritance Tax purposes which will remain in your estate for seven years after the date it is made. Should you die within that period, thre may be some IHT to pay but once the gift is over three years old, the potential liability tapers away as you will read here.

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

Customer: replied 1 year ago.
am I correct in saying that I can simply transfer £100K of mortgage to my parents without incurring any tax charges in any case as it is all within £325,000 value ..?
Customer: replied 1 year ago.
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Expert:  TonyTax replied 1 year ago.

You say and I quote "transfer £100K of mortgage to my parents". Assuming you are making a gift to your parents and they aren't taking on responsibility for your mortgage, there are no immedaite tax implications. If you live for seven years after making the gift, the £100,000 falls out of your estate for IHT purposes.

Customer: replied 1 year ago.
it would be a gift.. My mortgage provider requested a solicitor's advice as part of mortgage application. Could you provide a letter in a more professional format, or it is not possible and this correspondence would be the only proof of 'no implications' that I can have? thanks
Expert:  TonyTax replied 1 year ago.

I cannot provide a letter I'm afraid. The lender should consult their inhouse or external tax advisers for confirmation of my osition if they need it.

Customer: replied 1 year ago.
ok, thank you very much for your help.
Expert:  TonyTax replied 1 year ago.

Thanks.

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