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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10774
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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I have a property my daughter and husband are currently

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Hello, I have a property my daughter and husband are currently living in. I am moving to France and wish to sell the property to them interest free over a period of fifteen years, to the sum of £130,000. I originally bought the property two years ago from my local council after residing there for 20 years for £56,000. What are the financial pitfalls in taking this course of action for either party..Furthermore what would be the best course of action.
Kind regards
Hello and thanks for using Just Answer. My name is ***** ***** am happy to assist you with your enquiry.
If you bought the property under the Right to Buy (RTB) Scheme, you will be liable to repay a percentage of the discount if you were to transfer the property to your daughter and her husband.
Are you aware of this, if indeed you did buy under the RTB scheme?
Kind Regards
Customer: replied 2 years ago.
Hi Al, I am aware of the RTB scheme but after five years this does not apply as it is her family home.Kind regards
Customer: replied 2 years ago.
I am searching more for the capital gains implications of this course of action.Kind regards
Thanks for your reply.
If you were happy for your daughter to pay for the property over 15 years, it would normally entail you transferring the property to them now, and for you to have a Charge registered against the Deeds, confirming the conditions and repayment to you of the £130,000 over the 15 year period. However, if you were to do this, you would be liable to repay the appropriate discount to the Council.
Therefore, you will need to take a different approach- as they are living in the property, it would be normal for you all to enter into a Tenancy Agreement, to include a clause granting your daughter and husband to acquire the Freehold on the condition that they pay to you the £130,000and which agreement will set out the monthly/yearly payments. This way, the Deeds remain in your name until they have paid the £130,000 and from their point of view, they have something legally binding so that as and when the full monies have been paid, they know you will be under a legal obligation to transfer the property to you.
Although I am not an Accountant, the only other "financial pitfall", is that you will be liable for Capital Gains tax as and when the proeprty is eventually transferred to your daughter. You would need to speak to your Accountant for the specifics.
I hope this assists?
Please let me know if you require any further clarification.
Kind Regards
Aston Lawyer and other Law Specialists are ready to help you
Customer: replied 2 years ago.
Thankyou, you have been helpfulCheers
Many thanks.
If you sell for £130,000 and you bought for £56,000, the gain you have made is £74,000. Currently, you have a yearly allowance of £11,100, and if you have not used the previous year's allowance, you could use that sum also, meaning you can deduct £22,200 from the profit made, giving £51,800.
CGT (CURRENTLY) is •18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)
Kind Regards