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Diy conveyencing between husband, wife .... *and child* to avoid tax

Summary:- How do I transfer 1/4 of a house that I own to my child, so that I own

3/4 and she owns 1/4?

Background, *simplified*. I own a second house. Profit on sale would be 60k. To utilise two CGT allowancs, I will transfer half to my wife. (A solicitor wanted £250, but the Land Registry hand-led me through the process for just £40. Very easy.) If we sell, CGT is charged on £60k-16k(approx)=£44k.

But another way is to give a quater of it to our daughter each year for 4 years. That means we'd be liable for tax each year on the profit on a quater of the house. ie {(60k/4) = 15K}. 15k- 2x allowance= no tax payable. So we'd pay no tax. After 4 years, my daughter'd own the whole house.

How do we allocate ownership unequally? The land registry dont record such detail and said they were not allowed to advise me on this.

(There was an answer in the Mail on Sunday recently which sugested something like this.

Thanks Tony

Reply to
TonyJeffs
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Do yo uwant to gove your daughter the house, or is it a behicle for avoiding CGT? Once you have given your daughter the whole house she could, of course, decide not to sell it after all. Would your possible CGT liability then 'hang in the air' until she decides to sell and the gain is realised?

Don't forget the inheritence tax (lifetime gifts) implications of making gifts like this. Gifts to your wife (if you are married) are exempt but not those to your daughter.

Robert

Reply to
robertmlaws

Hi Robert It is primarily to avoid CGT. I appreciate what you're saying that my daughter could decide to keep the house. I don't think she would, but I could live with that if she did. Part of the reason for considering selling it is because she doesn't want it. If she did keep it, I wouldve fully utilised my CGT allowances, and neither of us would have made a taxable profit at that point. If the house went up in value again, from the market price at time of transaction, well then she would be in the tax situation that I am in now, and she could if she wanted to sell it in stages to someone else.. ....I think, (?)

To help me understand this, as in my other thread... If I gave, or sold, her a part of the house, it'd affect my tax liability, not hers? A gift from me to her of part of the house, or equally a sale from me to her at a cut price, would both be seen by the taxman as if it were a sale at market value?

Cheers And happy Christmas Tony "Eboneezer" Jeffs

Reply to
tonyjeffs

I think the crux is that if she sells it, what will she do with the proceeds? If there is a secret agreement between parents and daughter that teh "gift" is a scam for CGT avoidance, and that the proceeds will go back to the parents, then all hell could break loose. But if you want to give her "the house or what it's worth", that will be fine.

Yes.

Yes. But also, if it's a gift and not a sale, there will be Inheritance Tax implications. If you die within 7 years of making the gift, then part of the value of the house will be clawed back into the estate and taxed as part of it *in addition* to the CGT you will already have paid.

Reply to
Ronald Raygun

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