Hi,

I have owned a second house since 2001 (my fathers) since he has past away i now want to transfer the ownership to my son ? How can i do this without myself or him getting taxed??

Thanks

Liz

hi Liz, to be honest it is a mine field, you could spend a lot of money on advice from professionals and still have to pay some kind of tax, so my advice is to play it by the book as this will save any complications in the future.

How much is the house worth?

There are several types of tax you would have to factor in:

1) Stamp Duty Land Tax - if your son either pays any money towards the house or accepts a charge/mortage that is on the house, he will have to pay SDLT on any amount over £125,000 (or £250,000 if this will be his first property). If you are giving the house to him free of charge and without any mortage/charge on it, he will most likely not be taxed.

2) Capital Gains Tax - as the house is (presumably) not your principal place of residence, you will have to pay tax on any profits you make from its sale. The calculations are quite complicated, but generally you would pay tax on the difference in value between the time you inherited the house and the time you sold it. This will usually be taxed at 18% and is made on the VALUE of the house, not how much you sell it for (or give it away for free).

3) Inheritence Tax - yes I know it's probably a bit early but worth considering! Any asset which you gift during your life-time will be counted as part of your estate if you give away the asset 7 years or less before death.

The quickest and easiest way to transfer ownership is by way of a 'transfer of equity' whereby you would trasnfer your share in the house to your son in exchange for £1.00 (or any token sum). It is quite probable that, due to the market crash, your second home is probably not worth too much more now than it was in 2001, so hopefully the tax liability is not too great.

You also get the first £10,000 free of capital gains tax in each year, so that will minimise your exposure too. Best to see a conveyancing solicitor about getting the transfer done - depending on the value of the house you can get this done for around £100.

any q's let me know!