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Selling property to family members

(8 Posts)
ignominious Tue 16-Sep-14 15:27:59

My father is in his 60s and wants to downsize. We also want to move and our current house would be perfect for him.

Our house is worth more but we thought if he just gives us whatever he can afford from his sale, we can use that to get a bigger place.

What is the best way to do this, taking into consideration that he would eventually be leaving anything to me and my brother in his will? Would he be liable for stamp duty on the purchase of ours? Would we be better off leaving it in our names? In which case I believe he would have to pay rent?

Obviously were going to ask a solicitor but just wondered if anyone had done this. Or knew what sort of solicitor we should be asking.

breward Sat 20-Sep-14 08:41:11

Not sure where you stand.

We have a small property that we rent out. We would like to give it to our daughter on her 18th birthday. This means she could keep the rental income tax free (as it is only 7k a year) when she is a student at univ. After univ she can sell the property and have the proceeds as a deposit for a house. Can you legally sign over a property as a gift or would she have to buy it from us?


Needmoresleep Mon 22-Sep-14 11:12:08

Both are ones for an accountant or lawyer.

1. You need to be careful about gifts from capital. Limited often to £3,500 pa.

2. You need to be careful about transferring a property at anything less that a reasonable market value, as this could be see as a way of avoiding stamp duty.

3. Older people need to be careful about transferring ownership of assets if this could construed as a "deliberate deprivation of assets", ie to avoid contributing to care costs etc.

With Zoopla etc using land registry records, it is very easy to spot sold prices which deviate significantly from the norm. My assumption is that it is reasonable to use a lowish price if you have a good buyer, no chain and are saving estate agent fees etc. But it needs to be in the ball-park. I would do it by the book. Use a sensible conveyancing solicitor. Have three valuations from estate agents, based on prices that might be acceptable in order to achieve a quick sale from a well qualified buyer. Speak to the Inland Revenue or an accountant about implications of gift, inheritance or other taxes.

yanasmommy Tue 30-Sep-14 09:05:38


this all sounds very complicated - I would definitely try and get some legal advice.

I know still when my mum wanted to downsize and we were thinking of something very similar - but I got a little bit scared once friends advised me (so not always the best asking people who do not totally understand - or are trying to be helpful though they actually do not have a clue lol)

So I would definitely get professional advice - not sure where you are but when we had similar things to sort out we used these guys they were really helpful.

But there are loads of services and you could also have a look at the land registry website they got some good guides there

Hope this helps



Greengrow Fri 21-Nov-14 07:44:54

Hang on it is perfectly lawful to make gifts in English law. People do it all the time.

The most important issue is is there a mortgage. If there is none then the gift is easy. In the breward case, give to the daughter the buy to let. There is no stamp duty If there is a mortgage the lender is not going to allow it and I think then stamp duty is payable too.

So gifts of unmortgaged property are fine. You should use a solicitor to do the transfer of the land and make sure the property is fully registered in the child's name. Also take some tax advice as parents cannot just give their cash to children to pay lower tax on the interest earned but I expect there will be no problem here as the child will be 18. If someone is under 18 it is more complex as the property would need to go into a trust and extra taxes like ATED m ay be paid on property held in trusts and by companies from (soon) £500k worth of property - a sort of pre mansion tax the Tories brought in paid on an annual basis.

On the original post if your father makes gifts now to you and your brother and survives 7 years then no inheritance tax is paid on that money which it could be at 40% if you get it when he dies. However check he has enough capital to be over inheritance tax limits anyway as that is key. Assuming he is over IHT levels which are roughly about £300k+ assuming he has no spouse.... then if you give your small house to your father and it has no mortgage there is no stamp duty and no problem (again use a solicitor). He sells his house and he chooses to give you and your brother a share of the excess proceeds. So say his house is worth £600k and yours £200k, you give him yours and he sells his for £600k. So far you have given him £200k. He then sells his house for £600k. He gives you your £200k back and you and he are square. The remaining £400k he divides between you and your brother so each of you have had a net £200k each as a gift now to reduce IHT later. I really think you need to see a solicitor who is good at tax in case there are traps I am not thinking of here. It would certainly be simpler if you gave him your house and he gave you and your brother cash out of any surplus.

Fluffy40 Fri 21-Nov-14 08:05:39

Solicitors don't give tax advice. You need a good accountant or financial advisor.

bennyjames Thu 22-Jan-15 10:36:15

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

BeggarsCantBeChoosers Thu 22-Jan-15 11:16:46

I don't think you can gift a house. My family tried this but in order to change deeds etc, they had to officially buy it using probate value, which was cheaper but definitely not cheap. hmm Shocking when it's mortgage free.

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