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give buy to let away

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Author Topic: give buy to let away  (Read 1543 times)
Posts: 41

I like property

« on: July 28, 2019, 09:30:50 AM »

I have a BTL that my daughter rents from me at market rent 650 pm,
house is worth around 170,000
mortgage  50,000
we paid 120,000 for  house in 2014
she is now able to have a mortgage  her self

if I just give her the house, what would the  tax implication's be ?
for both my self and my daughter

I and my wife are both retired and pay basic rate tax 
« Last Edit: July 28, 2019, 09:35:07 AM by spuds »
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« Reply #1 on: July 28, 2019, 02:13:31 PM »

Broadly speaking, there are three taxes that may or may not come into play.

First you've got capital gains tax, which would be the same as if you sold to a third party - the value for CGT is based on what you'd get after costs in an open market sale.

Then, there's stamp duty, which is based on what your daughter pays for the property. If you give it outright, then it's nil. If you do something tricksy involving the mortgage, it might get more complicated but, if your daughter is a first time "buyer" she won't pay stamp duty on a property of that value anyway.

Finally (literally!) there's inheritance tax. If you die within seven years of gifting the house, it will be included in your estate for IHT purposes.

You'd be well advised to talk to an accountant: there are things you and your wife can do to minimise any tax impact. For example, you can gift part of the house to your wife first, without any CGT or IHT implications, which would then mean you'd have two lots of CGT allowances to set against the gain. You could also consider gifting part of the house to your daughter this tax year and part next year, so that's another couple of annual allowances.
Posts: 41

I like property

« Reply #2 on: July 30, 2019, 08:23:12 AM »

thank you Simon
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