Property Disposal: Father to Daughter - Mortgage Query

Property Disposal: Father to Daughter -...

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For tax purposes, the property will be shown as being sold at £150K which is reflective of its current delapidated state (and a fair approximation of market value), giving rise to a small CGT liability.

However, the father does not immediately require the funds, and does not see the point of the daughter taking out a higher mortgage for the sake of it. What would be the consequences of the daughter putting down a deposit of £25K, and taking out a mortgage for £75K (needed to redeem the existing mortgage (of the father)), making total "funding" of only £100K.

Would either the mortgage company or HMRC have an issue with the discrepancy between Sales Price vs. Consideration Paid. Would it perhaps be better to include a contactual clause that the balance of the consideration would be payable on demand, or within a specified (long) time period?
TS

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By AnonymousUser
03rd Nov 2006 18:49

For CGT purposes
the consideration will be market value irrespective of what is paid.
I think he may also be making a PET of the difference between mv and what is paid?
I don't know what the mortgage company will think but obviously they should be made fully aware of the situation.
Father should make it totally clear in whatever way the solicitor endorses that he is passing over his entire interest in the property otherwise might be arguable he has retained an interest.

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