• We Want To Gift A Third Share In Our Property To Our Son

    By Guest on 24th Feb 2017

    Can we gift a third share in our house to our son

  • 1 Answers

    By Guest on 25/02/2017

    Assuming your son isn't a minor you can transfer the property from your two names to yours and his name and elect to hold the property in equal shares. This would require the consent of your mortgage lender if you have a mortgage and would mean your son becoming jointly liable for the mortgage. This type of transaction is called a Transfer of Equity and is quite straightforward. You should bear in mind that if your son currently owns another property (and you have a mortgage on your property with an outstanding debt of £120,000 or more so that the share of the debt he will be taking on is £40,000 or more) then stamp duty will be payable at 3% of a 1/3rd of the outstanding mortgage debt. So if the current mortgage debt is £150,000 he would be taking on £50,000 so would pay £1,500. Bear in mind also that if he buys a property after becoming a joint owner of yours he will pay the extra 3% on that purchase.

    Alternatively you could enter into a trust deed which said that you held the property on trust for yourselves and your son. In this way you would remain the only legal owners (your son wouldn't be jointly liable for the mortgage and no transfer would be required) but he would be entitled to a 1/3rd of the equity. This option avoids the 3% stamp duty and can be used if your son is still a minor. You can put protections in the trust deed for yourselves such as ensuring you have the right to occupy the property (or any subsequent property purchased with the proceeds of sale) for life.

    Whichever route you go down, you should speak to a solicitor specialising in trusts as they will be able to help ensure that everyone gets the protection they need and you minimise any tax liability.

  • Post Your Answer


  • Do you want to be informed of further comments / replies? Yes No

Ask a Question

Search