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bigduckontax
bigduckontax, Accountant
Category: Tax
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I bought an end of terrace house with a garden to the side

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Hi I bought an end of terrace house with a garden to the side in 2007 with a Mortgage.I eventually got planning for a house on the side garden which I built in 2010 both properties are let, Although the original house still has a mortgage the new house is not encumber.Both properties have separate titles.I would like to put the unencumbered house in a family trust with me and my two adult children as trustees and me a the beneficiary until my demise would this incur CGT and stamp duty? I am retired the income from the two houses along with my state pension is my only income.The original house in 2007 was going to be my only resident but the recession bit home. Regards ***** *****
Submitted: 1 month ago.
Category: Tax
Expert:  bigduckontax replied 1 month ago.

Hello Bob, I am keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

What is the overall area of the whole house and garden. This data is essential to determine your position.

Customer: replied 1 month ago.
Hi thanks for being so prompt. The new house is small,I believe the build was APX 69 SQ mts if this helps.
Expert:  bigduckontax replied 1 month ago.

Unfortunately no, I need the overall plot size of the original end terraced house and garden before I can properly frame my reply.

Customer: replied 1 month ago.
I hope this helps?
Expert:  bigduckontax replied 1 month ago.

That looks well within the permitted ares, half a hectare. Thus the whole site and buildings thereon are covered by Private Residence Relief (PRR) which relieves CGT at 100%. Stamp duty at the current market value of the property might be chargeable to the trust on transfer. Why go through all the palaver of a trust.

Customer: replied 1 month ago.
I thought it my safeguard the property if I go doolally against care costs,and ultimately for the grand-kids,Although I do have LPAs in place.
Expert:  bigduckontax replied 1 month ago.

Yes that is a danger I accept. Fortunately in Scotland, where I live, care costs are covered largely by your local authority benefits.

Customer: replied 1 month ago.
Your very lucky in that regard. I am just trying to hang on to my ill gotten gains. Thanks for your help. Bob Lewis
Expert:  bigduckontax replied 1 month ago.

Delighted to have been of assistance.

Please be so kind as to rate me before you leave the just Answer site, Bob.

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Expert:  bigduckontax replied 1 month ago.

Thank you for your support, Bob.