How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 9276
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I have £40000 left to pay on my mortgage and my father wants

Customer Question

i have £40000 left to pay on my mortgage and my father wants to give me £40000 to pay it off, then i want to transfer ownership to him, what will happen in terms of tax and is there any fees involved, is this the best way?
JA: Where are you? It matters because laws vary by location.
Customer: uk
JA: What steps have you taken so far?
Customer: none
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no
Submitted: 8 months ago.
Category: Tax
Expert:  bigduckontax replied 8 months ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Is this your sole or main domestic residence.

Customer: replied 8 months ago.
i am currently renting to my father. I have no other property. I live in another rented accommodation.
Expert:  bigduckontax replied 8 months ago.

The UK has no Gifts Tax regime so we can forget about that.

However, as your property is rented out then there will be a liability go Capital Gains Tax (CGT on transfer.

Customer: replied 8 months ago.
the property is worth £75000, does this still apply?
Expert:  bigduckontax replied 8 months ago.

Yes, what did you acquire it for?

Customer: replied 8 months ago.
163;67,000
Customer: replied 8 months ago.
do you think that this is the best way around this situation? my dad wants the property but cant get a mortgage but has the £40,000 to pay off my mortgage and then live in it and still pay rent to myself for a few years to pay off the difference. I want to buy another property for myself and my family.
Customer: replied 8 months ago.
but i cant get a mortgage until i have more equity in my home.
Customer: replied 8 months ago.
well, the price that i want
Expert:  bigduckontax replied 8 months ago.

You have an Annual Exempt Amount (AEA) of 12K so with a gain of 8K there will be no CGT payable.

Customer: replied 8 months ago.
just to clarify, all i would have to pay is for the deeds to be transferred into my dads name? No Gift tax, no CGT.
Customer: replied 8 months ago.
based on the information i have provided.
Expert:  bigduckontax replied 8 months ago.

Correct.