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LegalNinja
LegalNinja, Solicitor
Category: Law
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Experience:  Solicitor
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I am selling my property to my parents - do I need to sell

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I am selling my property to my parents - do I need to sell at full market value or could I sell for less so they don't have to pay as much stamp duty?
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: No
JA: Where is the property located?
Customer: Knaresborough, North Yorkshire
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no

Hello,

Will you parents be purchasing with a mortgage?

Customer: replied 1 month ago.
No

You can sell the property at below the market value but there may be tax implications as a result which you may need to seek advice on. You may wish to gift the remainder of the value to ensure that the property is sold at full value, i.e. If the house is worth £400,000.00 and you sell it for £350,000.00, that means you are gifting £50,000.00.

I would suggest that you seek legal advice in relation to the potential undervalue as various deeds will need to be prepared.

Is there anything else I can help with?

Customer: replied 1 month ago.
What kind of tax implications? Is it in relation to stamp duty or something else? In terms of the value of the property, they are actually gifting us money to buy a new property out of the equity they have left over from their house sale so would that need deeds preparing as well or can they just give us the money?

Well there could be Capital Gains Tax (this is the profit you make when you sell something that has increased in value) that you may need to consider. An accountant will be able to assist you with this advice. Ideally, yes a deed should be prepared if they are gifting you money. Your solicitor acting in your purchase should be able to prepare this for you.

Is there anything else I can assist with?

I note that you have posted a tax question which is good. Is there anything else I can follow up for you or will that be all today?

Customer: replied 1 month ago.
No I think that is fine thank you

Thank you for confirming.

 

 

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All the best.

 

 

 

-LN

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