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Vineet S
Vineet S,
Category: Property Law
Satisfied Customers: 3087
Experience:  Freelance Solicitor at Self Employed
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I live with my mother in her house she bought; on the deed.

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I live with my mother in her house she bought; my name is ***** ***** the deed. I want to know what are the tax (and other implications) of a transfer of equity to myself. There is no mortgage on the house. The house is worth £300,000 and I wonder what is the average cost of this kind of transfer equity?
JA: The Expert's answer will cost $10 to $100, depending on the issue type and time to respond. You'll see the exact amount on the next page and can decide then. It's way less expensive and more convenient than any face-to-face visit.
Customer: OK.
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: No, I wasn't aware that I had to do any.
JA: Where is the house located?
Customer: Geographically?
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Not that I can think of right now.
Customer: replied 20 days ago.
My mother is a basic rate tax payer and I pay very little tax as well.

Welcome to Just Answer, I am a solicitor in England and Wales and I will be dealing with your case today.

Kindly note, I am not available for phone calls at the moment, however I can easily assist you via this online chat.

I will go through your question and will get back to you with my answer shortly.

Meanwhile, please ignore any phone call request pop-up, they get generated automatically without any input from the expert, so I have no control over these requests.

Hi there,

Your mother can transfer the property to your name via a gift deed. The most common way to transfer property to your relatives/ children is through gifting it. This is usually done to ensure children will not have to pay inheritance tax when parents die. Inheritance tax starts at 40%. It applies to any property you own over £325,000. As long as you live for another 7 years after you’ve gifted your property, your children won’t have to pay will be exempt from capital gains tax.

Gifting or transferring property to your children can mean your father is no longer the homeowner. This means he don't have any rights to the property. if your father sign over his house but remain living in the property, this would then be treated as a “gift with reservation of benefit.” This means he reserve the right to benefit from the property.

According to taxation rules, the house will then remain part of your mother's estate on her death, even if she live beyond seven years. One way to get around this is by paying rent to your children. But you will have to pay market rent , to take out of the IHT scope.

So, your mother can gift her property by making a gift deed, then sending TR1 and ID1 form to Land registry.

I trust this helps.

If you need further assistance, please let me know.

In the meantime, thank you for using Just Answers. Best wishes.

Customer: replied 20 days ago.
Thank you for your answer.
What influence would a Transfer of Equity have on inheritance tax? (My father died over a decade ago btw). Would a solicitor make the gift deed, get the forms and send them to the Land Registry? Does a gift deed mean the additional person would have joint ownership?

Hi there,

1) You would be liable for Inheritance tax, if the donor dies within 7 years of making the gift deed.

2) you would have to take assistance of a solicitor for executing gift deed and updating HM Land registry .

3) The donor can either give full or partial share of the asset, if it is part share , then both the donor and donee would be joint owner.

Thank you.

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