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Nicola-mod, Moderator
Category: Property Law
Satisfied Customers: 21
Experience:  Moderator
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I have been helping my son get on the property ladder. I have

Customer Question

I have been helping my son get on the property ladder. I have 25% equity in his house. He has the other 75%. I want to avoid capital gains tax liability if he wishes to sell up. I am happy to gift him my 25% outright but are there any time clauses attaching? If so, how long?
Thank you
Submitted: 2 years ago.
Category: Property Law
Expert:  Alex J. replied 2 years ago.
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
The only time clause that may be an issue is for Inheritance Tax purposes, you will have to survive 7 years following the gift, during which time the gift will be known as a Potentially Exempt Transfer (PET). If the gift is a PET then it will be exempt from Inheritance tax.
The problem you have is gifting someone an asset that has made a capital gain is a "disposal" for CGT purposes so you may have to pay capital gains tax any way. What will be relevant here is how much you have actually made - if at all? Will you have made a gain at the date of disposal?
How do you and your son own the property? Are you a legal owner or do you just have a beneficial interest?
Kind regards
Customer: replied 2 years ago.
We have a Declaration of Trust and we are both Beneficial Tenants in Common in unequal shares.I imagine the gain over 5 years for my 25% could be £60k but I have paid £42k in mortgage payments over that time.What are my options? For example:
1. Can my son buy my equity share from me for a nominal sum?
2. Is there a capital gains tax free allowance? Could I give half of my equity to my wife so we both get the tax free allowance?
Customer: replied 2 years ago.
Ideally I would just like to give my son my share so that any/all profit or gain is his.
Customer: replied 2 years ago.
We have been asked to enter our credit card details twice. Will you please confirm that we will not be billed twice?
Expert:  Nicola-mod replied 2 years ago.
It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.
I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!