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Original poster

How to put a house in a child's name.

20 replies

grammarly · 12/08/2018 08:35

Pil want to pass on their rental property to Ds. They want to do this whilst they're alive and get all their affairs in order.

As I understand children under the age of 18 can't own property. We don't want to put it under our name as it's not ours anyway and does not benefit us. How do we go about this?

OP posts:
WhatAnAbsolutePenis · 12/08/2018 08:36

You need to speak to a solicitor. There's so much more to it then you think.

Namechangeforthiscancershit · 12/08/2018 08:39

A huge amount to think about here:

  • can your PIL afford to give your DS the rental income so that the gift is effective for IHT?
  • is there any prospect of your PIL needing help with care home fees in the future (the gift will be a problem if they do)?
  • have your PIL worked out the CGT charge, and considered whether to hold it over with a trust for your DS?
  • are you happy for your DS to lose his FTB SDLT treatment in due course?

I could go on and on! They need proper advice before doing this. That advice will include what to do with the legal title until your DS is 18. A few options and none of them are complicated.

sagasleathertrousers · 12/08/2018 08:39

I have no detailed advice but if it's getting a rental income I imagine it would be very difficult for tax reasons. Surely it could be seen as a tax dodge ( not implying that it is!)

I only say this as I'm looking at transferring my btl to my parents (as they have inherited some cash and can repay the mortgage and then get quite a good yield on the rental income) and it's proving to be a bit of a tax nightmare. And we're all adults. Maybe I should start my own thread for advice actually!

MargaretDribble · 12/08/2018 08:40

Go to a Solicitor.

RobinEggs · 12/08/2018 08:42

It’s a complete pita. My dm put one of her houses in trust for me a few years ago and is currently in the process of undoing it because it was totally pointless. I was liable to pay CGT on it which I simply could t afford.

Namechangeforthiscancershit · 12/08/2018 08:44

It’s a complete pita

Agreed- massive pita potential. It can be worth it though if done properly and for the right reasons.

Hope you can get everything sorted soon.

Original poster
grammarly · 12/08/2018 09:09

Oh no! I had no idea it was going to be quite so complicated!

Namechangeforthiscancershit so many questions! What does FTB SDLT mean?!

Ok- about the rent. PIL have said that they still want to keep the income from it so don't know if that makes things more complicated! We hadn't even thought about care fees for the future! They have another property that they live in.

They will be seeing a solicitor at some point.

OP posts:
Namechangeforthiscancershit · 12/08/2018 09:13

First time buyer for stamp duty. Basically if your DS wanted to buy a house in the future (and the rules hadn’t changed) he’d pay stamp duty, whereas if he hadn’t had this house put in his name he wouldn’t (up to a maximum value).

Honestly if they aren’t paying over the rent don’t bother. It would be a gift with reservation, so not IHT benefit and they would pay CGT for no reason.

PalePinkSwan · 12/08/2018 09:18

SDLT is the tax you pay when you buy a property.

FTB is first time buyer.

FTB’s currently benefit from some SDLT exemptions, as well as help to buy schemes.

Your DS would lose those advantages as he won’t be a first time buyer.

So depends wjether the likely value of the house outweighs those.

You all need proper legal advice on this, there are loads of issues!

BMW6 · 12/08/2018 09:54

Surely if the house becomes the legal property of your child no-one else could have any legal right to any income from it?
Because otherwise it would be fraud.

PalePinkSwan · 12/08/2018 14:44

There’s various ways the son could own the house legally but pass the rental income along to the grandparents without it being fraud, so long as it was set up properly.

There are loads more issues here that the OP needs proper advice on.

FfionFlorist · 13/08/2018 16:08

Tax evasion...yuk.

NalderAndCollier · 13/08/2018 16:23

The list of horrible tax consequences if they do this could be very long indeed. They need legal advice about the whole idea preferably from a lawyer who's a taxation specialist.

user1471462115 · 13/08/2018 16:27

And your son could sell it the day he turns 18 and spend all the money on whatever 18 year olds like e.g.weed , fast cars, drink, fast women, holidays, motorbikes and so on. What fun at 18 !!!!!!

LeeValley2 · 13/08/2018 16:33

You won’t need to pay cgt if the property is gifted. It’s not a tax dodge if done properly, it’s a very common occurrence to gift your properties away and they won’t have a worry of care Home fees if neither one of them is ill. It’s a good time to do it actually as the inheritance tax liability will go down each year for 7 years.

LeeValley2 · 13/08/2018 16:34

RobinEggs if you were gifted the property then you wouldn’t have to pay cgt.

StickyCar · 13/08/2018 16:49

lee it was put into a trust. It couldn’t be gifted to us for some reason that I’ve now forgotten.

HollowTalk · 13/08/2018 16:50

How old are they, OP? And how old is your son?

Namechangeforthiscancershit · 13/08/2018 17:37

You won’t need to pay cgt if the property is gifted

You will if it’s outright. You won’t if it’s a gift into trust and held over, but you’ll still be paying it eventually and missing out on the uplift on death.

Namechangeforthiscancershit · 13/08/2018 17:38

It’s a good time to do it actually as the inheritance tax liability will go down each year for 7 years

How would that work when it’s a GWRoB?

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