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Parents Selling House/CGT Liability

Hi,

In 1998 I helped my parents buy their council property under the RTB scheme, as they wouldnt be able to get a full 25year mortgage. So all

3 names are on the deeds.

Since then I have purchased my own house to live in.

This summer, they are wishing to sell the property and live in a caravan park. Therefore my question is to try and find out if there are any implications of this arrangement when they do come to sell? As this was purely for me to act as "guarantour" for my parents, as I have no financial interest in this whatsoever.

Any advice is most appreciated.

Regards Mark

Reply to
Mark Smith
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In message , Mark Smith writes

Hmm, I it is unlikely that you are 'on the deeds' and are also only a guarantor. It is more likely that you are 'on the deeds' and also a debtor on the mortgage.

Can you clarify?

Reply to
john boyle

yes, of course. When we pucrhased the house from the council, the application was made in my name (to the mortgage company), but my mum, dad and myself signed the contracts. When I bought my own house 4 years ago, I remortgaged my property to pay off the mortgage on their house.

When I received the titles from the Land Registry (via the bank) all 3 names appear. So, when it comes for them to sell, and retire and downsize, I wouldnt want them or myself to be hit with any CGT for instance, as it was always my intention to help them live the rest of their lives with peace of mind.

Hope this clarifies.

Reply to
Mark Smith

It would seem this is a loan arrangement rather than a purchase one? Or was it the parties' intention that you bought the house, but your parents could stay there rent free for life?

If the former, your parents are the beneficial owners of 100% of the property, your name on the deeds notwithstanding. I would recommend some documentation is drawn up to confirm this - if you have not already done so.

When the property is sold, there will be no CGT, assuming it has always been your parents main residence.

Reply to
Doug Ramage

Hi Doug,

It was our intention to purchase the property on 25 year term, and they could give me rent (on informal basis), when my dad had health problems, I advised them to stop paying me rent, and use the money more effectively. (therefore I took on this extra burden - in addition to my own mortgage). So for them it was their main residence, but not for me.

But as they come to retirement, they wish to buy a small caravan and live in that, hence my uncertainly about tax implications.

Many Thanks for your advice. Regards Mark

Reply to
Mark Smith

"As this was purely for me to act as "guarantour" for my parents, as I have no financial interest in this whatsoever."

If you had no financial interest in the property, why were your parents paying you rent? Or did you mean contribution to the mortgage?

Is the mortgage in the names of the 3 of you?

Reply to
Doug Ramage

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