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Ask Clare Your Own Question
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34895
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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A few years ago I assisted my daughter with a house purchase.

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A few years ago I assisted my daughter with a house purchase. She already had a house and a mortgage in her name, however, because of debt issues after a messy divorce, and the fact that she did not have a full time income because she had young children, she was not able to obtain a new mortgage when it came time to sell the house and purchase a new one.
I ended up buying the house in my name. The majority of the deposit was paid from the proceeds of her home, with me lending about £8000 to top it up. She has since lived in the house and paid me 'rental' which in turn I pay to the mortgage company.
Her situation is improved and she is in full time work so she should be in a position to buy the property from me in the near future.
I want to know what would be the most tax efficient way to do this so that I can avoid CGT. Whether that be to pass it on to her, sell below market value etc. At the time of the purchase I had a deed drawn up which effectively secured her interest in the profits of the house, although she is not on the title.
Thank you for your question
How much was the purchase Price and how much is the property worth now?
Customer: replied 2 years ago.

Purchase price was about £154,000, current value about £210,000.

I should add that I have not made any profit, 'rent' payment just covers mortgage, and I have spent about £35,000 on the property for new kitchen and two bathrooms

Sorry I should also have asked how much is outstanding on the mortgageClare
Customer: replied 2 years ago.

About £105,000

I do not wish to be rude but how old are you and - can you afford to take a two stage approach to this?
Customer: replied 2 years ago.

I'm 60. I am not in the greatest financial position having lost my business of 30 years in the recession. I only earn just over 40K pa. I may be able to consider a two stage approach, it really just depends on what options are available.

Just to check - has the Declaration of Trust been Registered at the Land Registry?
Customer: replied 2 years ago.
Yes, at least that was my understanding. It was submitted by the solicitor who drew it up
In that case all is wellCGT is linked to the Beneficial Ownership and not the Legal Ownership.You are the Legal owner your daughter is the Beneficial Owner.She is resident in the property and when she will have Resident owner reliefYou will not be liable for CGT when you complete the transfer as you have made no profit on the transactionI hope that this is of assistance - please ask if you need further details
Clare and other Property Law Specialists are ready to help you
Customer: replied 2 years ago.
That's great news, thanks very much for your assistance.
You are most welcome I hope all goes well