My husband and I both work and use all our tax allowance. We want to buy a buy to let property in cash but put it in our 3 adult children’s names. They are not tax payers as they are all travelling. We think this is a good idea as it will avoid the 3% stamp duty and avoid tax from the income as they are not tax payers and the rental income will be under the threshold.
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Yeah, but your kids get a house out of it, plus all that lovely rent lolly! They'll be loaded in no time, and they'll be able to afford to travel the world, expanding their horizons. You're lovely!
and.... they will never fall out in the future when one wants to sell up, never have a problem with their second home ownership, never actually want to live there when the travelling finishes and will happily sell up when you need the money tied up in that property to pay for your nursing home fees. And I haven't even stated on future ex spouses.
All in all sound a good idea.
I think you've misunderstood. Mum and dad are giving it to the kids, because they're lovely parents. They won't be wanting the money back, when there are nursing home fees to pay.
Ok - points taken but what are the positives? My glass is half full.....
Is your glass rose-coloured ?
Just some of the things I discuss with clients with an idea like yours:
Have you thought of a Trust to avoid children's future divorce problems-with 3 children it will happen to one of them?
As pointed out-have you made a conscious decision to avoid nursing home fees?
Have you thought of one of the children going off the rails in the future?
What happens when one of the children need the money but the other two do not want to sell?
Giving the constant rise in house prices have you considered capital gains tax?
The children will all pay the 3% SDLT on their own purchases- so you are probably trebling the SDLT.
Give them each a deposit for their own houses.
Maybe find an Accountant.
I am also partly self employed and I’m not sure if I can work that to my advantage too.
Work it to your advantage??
To save looking it up here is the quote lion refers to.
“For now we see through a glass, darkly; but then face to face: now I know in part; but then shall I know even as also I am known.”
The meaning is you see now only partly, but later will see more clearly ( with God's help ).
You say "We want to buy a buy to let property in cash but put it in our 3 adult children’s names. "
You can do one or the other but not both. It's either yours or your childrens. Doing things to "avoid the 3% stamp duty (sic)" and to "avoid tax from the income" may or may not be legal depending on exactly what your intentions are.
I hope your health is good as there could be a PET. Also make sure you have a new will (or even a first will)
Unless reliefs are involved, a PET as an outright gift does not make the (IHT) situation worse. A PET with benefits reserved does not make the situation better.
There was a thread in here not that long ago about an alleged lifetime gift of property where the (supposed) donor had kept the rents and the (named) recipient had not known of the so-called gift. It had created all sorts of havoc. Even if the OP+spouse wanted to help their children, this would not be the right way to do it. As it's for
it's wrong in every sense.Purely financial reasons!
it's wrong in every sense.
Jane has made it clear she's only interested in hearing positives.
I think Jane's long since fuched off, to be fair.
Good. When she said her glass was half full, I thought she must have already emptied and refilled a few times.