How would this work? What tax would you pay?

[Shelvesoutofbooks]

This is purely my curiosity - and Google isn't helping

But what are the tax implications of buying a property for someone else who isn't a family member?

Say there are two friends - neither a home owner - and one of them would buy a property for the other, in cash, what tax would they be paying? Say property cost around 400k.

So if person A is technically only paying for the house, but would not have anything to do with the property, how would it work?

Stamp Duty on purchase. Who is on the deeds? If the non occupier then Capital Gains tax if it sold later on or Inheritance Tax as part of the estate depending on value. If the occupier although the property would be a gift from buyer and it is still potentially liable to Inheritance Tax as part of buyer's estate, plus any rent paid would be taxable as income.

Why would someone buy someone else a property and then have nothing to do with it? Have they won the lottery or something?

If they are gifting the house, I would think there won't be any tax implications unless the person who buys the gift dies soon and it gets included in their estate or if they go into care and it falls under derivation of assets.

But what are the tax implications of buying a property for someone else who isn't a family member?

It would help if you told us the back story. People don't just randomly buy houses for others with nothing in return. Nothing that anyone replies to you is valid until the full story is known. There are various tax anti-avoidance measures in place for artificial transactions or those between connected persons, which would over-ride normal rules if they apply.

There isn't a back story - I was watching telly and one of those home selling shows was on, and they mentioned how someone they are not related to them is paying for the house but will have nothing to do with it. So it made me wonder why would anyone do that, surely you'd pay lots of tax on top of the actual house price?

I'd have thought if you've the spare cash to buy someone a house you are not going to be overly worried by the tax!
In any case, as PP have said, I'd expect stamp duty and, if the giver dies within 7 years, inheritance tax to factor. But no special lavish-gift tax!

I think in that context they surely mean its a partnership but one person is putting up the money and one is doing the labour and then they split the profits when they have done it up and sell?