Family member on deeds liable for capital gains tax?

Family member on deeds liable for capital gains...

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Is a Mother who is on a joint mortgage and appears on the deeds of the house accountable for capital gains tax when she is removed from mortgage and deeds. 

I am looking to purchase a house and need my mothers help to raise the mortgage. We've been offered a joint mortgage on a property which means that she would have to appear on the deeds of the house. 

She appears on the deeds of her home. A property she owns outright. 

Over the next couple of years, my partner will take my Mothers place on the mortgage. Refinancing is not a problem. 

My question is, when my Mother comes off the Mortgage and the Deeds will she have to pay any form of Capital Gains Tax / Gift Tax / Other Tax?

Would be grateful to hear your thoughts on this. 

Best wishes and thanks!

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By campbed
06th Oct 2011 19:33

Does Mum have a beneficial interest in house and/or pay mortg

You post is a bit confused.

Just lay out logically the facts of purchase of contemplated house-- expected purchase cost of house, who provided the deposit, size of mortgage (balance of cost - ignoring transaction costs) and who will occupy house.

Will Mum pay any of the mortgage fees and later payments or is she just mortgagee to guarantee that you make payments and she will only do so if you default?

When in future will you refinance so that Mum comes off a mortagee and your

partner takes her place as mortagee. Will Mum have paid out any money by then or will you have paid everything?

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By MBK
08th Oct 2011 14:22

On the assumption ....

... that the only reason your mother will be on the deeds and the mortgage is to make the purchase possible (and not to benefit financially) all you need to do is have the solicitor handling the purchase draw up a simple declaration of trust by which she states that she holds her share benefically for you. That way there is no question of tax on a future transfer.

However, when she comes off the deeds and the mortgage, there may be SDLT on the amount of the mortgage at that time if it is above the exempt limit.

 

 

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