First question was if I sold my son the property would I have to pay capital gains tax someone suggests that I just give my son the property is this possible or not can I make it a gift.
2007-03-12 23:29:08 · 12 answers · asked by ml20061 1 in Business & Finance ➔ Personal Finance
yes that is fine dad , i have the papers here
2007-03-12 23:33:42 · answer #1 · answered by Anonymous · 0⤊ 0⤋
UK answer: If you dispose of a second property which is not your main residence, then Capital Gains Tax will arise. If you give the house to your son, then CGT will be chargeable on the difference between the acquisition price and the open market value at the date of the transfer. This is because you are not making a transaction at 'arms length'. ie you are giving the property to a relative. However, the payment of the CGT can be deferred until your son sells the property and cash becomes available to pay the tax. If you sell the house to your son at open market value, then CGT will be payable on the profit made, as before, but tax payable by 31 Jan following the tax year of the sale.
Also, if you gift him the property, this will be a gift for Inheritance Tax purposes and you would have to live for 7 years in order to avoid a charge on your estate.
Two tips:
1. never do anything just for tax reasons
2. take proper legal/tax advice.
2007-03-13 06:48:08 · answer #2 · answered by fengirl2 7 · 0⤊ 0⤋
Are you talking about a house in the United States? If so, there are some rules that apply to gift giving. You're only allowed to give $11,000 per year without your son having to pay taxes on it. If the house is jointly owned with your wife, you could each gift $11,000 for a total of $22,000.
I'm posting a link for you to read. The first thing you would need is an appraisal so their is no question as to the value.
You could possibly sell it to him for $10 or something but I don't know if there would be tax ramifications on that or not. I'd talk to a CPA.
Regardless, I think I'd get some expert tax advice so one of you doesn't end up with a huge surprise next year at tax time. The IRS put in rules years ago about the maximum you could "gift" per year to keep people from "gifting" personal fortunes to avoid inheritance taxes. Inheritance tax laws have change since then but the "gift" tax hasn't. The maximum you can give to one of your kids in a year without them having to pay taxes on the gift is currently $11,000. I would get some advice from someone other than the Yahoo answer board though before you complete the transaction.
2007-03-13 06:45:06 · answer #3 · answered by Faye H 6 · 1⤊ 0⤋
In the UK, yes you can give your son your property. However, if you were to die within 7 years of making the gift, your son would have to pay inheritance tax on the value of the property.
If you sell the property to your son, whether or not you pay capital gains tax depends on whether the property you are selling is your main home. if it is, you would not have to pay capital gains tax as it would be covered by the main residence exception. However if it is an investment property that is not your main residence you will have to pay capital gains tax.
If your son does not use the house as his main home, he would have to pay capital gains on it if he sold it.
2007-03-13 06:42:33 · answer #4 · answered by Anonymous · 2⤊ 0⤋
You can transfer (gift) the property to your son, as long as you dont have a mortgage. Simple enough to do, should cost about £300 plus VAT and land registry fees. If just a transfer and no money changing hands, capital gains tax wont be an issue.
2007-03-13 06:32:23 · answer #5 · answered by Sugarlump 3 · 0⤊ 0⤋
You need a good solicitor and accountant and don't ever die or the Government take most of your money back in Inheritance Tax.
You can sell your house to your son at market value.
2007-03-13 06:44:42 · answer #6 · answered by Anonymous · 0⤊ 0⤋
You need to get advice from a professional tax expert.
There could be capital gains tax liabilities for both of you. Then there could be implications as far as inheritance tax is concerned.
2007-03-13 06:42:03 · answer #7 · answered by Mark J 5 · 0⤊ 0⤋
As I'm an EXPAT, I couldn't purchase my own property, my Mam bought a property in her name (using my cash) - when I get back all we have to do is go to a solicitor and get the name changed.
Basically you just need to pay the solicitors fee!
2007-03-13 06:33:34 · answer #8 · answered by Anonymous · 0⤊ 0⤋
i think there is this clause where u can actually sell your property to your son for a ridiculous amount
not very sure but check this website
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/InheritanceTaxEstatesAndTrusts/DG_4016736
2007-03-13 06:34:22 · answer #9 · answered by me 5 · 0⤊ 1⤋
No your son should work on his own merrit and gain the money and experance that does not mean you cant help him. why dont you tell him you will help him out with money but dont just hand it oway you will only be helping yourself out and not your son
2007-03-13 06:40:16 · answer #10 · answered by James R 1 · 0⤊ 2⤋