Owain wrote:

"Phil Norman" wrote
| Essentially I want to sell my house to my daughter for a nominal price
| - £35,000 instead of the £150,000 that it's worth. We have various
| reasons for wanting to do this. Mainly I just want to give her the
| property (it will be hers anyway some time in the future), but I
| need to pay off the existing mortgage - that's were the £35,000
| comes in. Then my wife and I plan to move into another property
| that we have some involvement with, but don't own.

One point to consideder is that in the vague and distant future your
daughter's liability for capital gains tax may be based on the difference
between what she pays now and its future value. It might be better for your
daughter to pay you a more realistic value for the house now (perhaps just
below stamp duty threshold) to lessen her tax burden later. You could then
give her a gift in cash, which I think will be inheritance tax free if made
7 years before your eventual demise.

I agree with RichardS that it's a tax accountant you need. You should
consider the overall liability for tax across both your and her
circumstances.


I would agree with that. I've recently been filling in Inland Revenue
forms while winding up my late father's affairs and one thing it
explicitly asked was whether his house had been sold at an artificially
low price (can't recall whether there was a time limit on that, but it
might have been 7 years). I guess that is to catch people trying to
avoid Inheritance Tax.

Another gotcha with selling property is if you should be unfortunate
enough to end up in a Nursing Home or such and have to claim State
Benefits to cover/help with the cost. If you have given your home to
your child(ren) within the preceding 7 years (or sold it to them for a
token price) then the Social Services still consider it yours[1] and
consider that you have assets equal to it's realistic market price, i.e.
you won't get any benefits even if you are otherwise penniless. Again, I
speak from experience of dealing with my father's affairs when he ended
up in a Nursing Home following a stroke.

[1] There was a court case a couple of years ago about this where the
plaintiff claimed that the house was given (about 4 years previously) to
the children *before* (s)he became ill and therefore the Soc. Sec.
couldn't treat it as an asset. The court ruled in favour of the plaintiff.

Expert advice is definitely recommended.

Owain