Selling House to Family Member

[securespark]

Sell it? It's your daughter FFS, give it to her.

Just try not to die until after 2025.

That's how I understood it. You can gift her the house but your heart needs to keep pumping for 7 more years to avoid taxes on the gift.

 

[^woody^]

That's how I understood it. You can gift her the house but your heart needs to keep pumping for 7 more years to avoid taxes on the gift.

As a bonus, the chances of the daughter bumping him off for the inheritance and insurance are significantly reduced. Well at least for a while.

 

[Doug99]

To clarify - I am seeking to downsize from a 4 bedroom detached house to a 2 bedroom bungalow so need capital from the house sale. My query was regarding the sale of the house to my daughter and at what selling price would avoid any accusation of 'gifting the house' to avoid inheritance tax laws.

All estate agents have a vested interest as they claim a % of the selling price, so the higher the price the better!

For example........... if the average of 3 valuations came to £300k and I wanted to sell to my daughter for £250k, would the conveyancing solicitor be obligated to inform HMRC?

Cheers

 

[sodthisforfun]

To clarify - I am seeking to downsize from a 4 bedroom detached house to a 2 bedroom bungalow so need capital from the house sale. My query was regarding the sale of the house to my daughter and at what selling price would avoid any accusation of 'gifting the house' to avoid inheritance tax laws.

All estate agents have a vested interest as they claim a % of the selling price, so the higher the price the better!

For example........... if the average of 3 valuations came to £300k and I wanted to sell to my daughter for £250k, would the conveyancing solicitor be obligated to inform HMRC?

Cheers

The 50k difference would be considered a gift, and if you die within 7 years, she will have to pay tax.
Anyway, found this, pretty much covers everything? Hope helps.
https://www.telegraph.co.uk/money/c...ants-sell-house-can-avoid-using-estate-agent/

 

[Roger928]

The 50k difference would be considered a gift, and if you die within 7 years, she will have to pay tax.
Anyway, found this, pretty much covers everything? Hope helps.
https://www.telegraph.co.uk/money/c...ants-sell-house-can-avoid-using-estate-agent/

IHT doesn’t kick in unless the deceased’s estate, including property, savings, pensions and investments, exceeds £325,000.

My Dads deceased wifes estate is worth 1.2 million. Her two sons will get a share after the IHT is paid I suspect. And after my Dad gets his share.
As he is next of kin.

 

[Doug99]

The 50k difference would be considered a gift, and if you die within 7 years, she will have to pay tax.
Anyway, found this, pretty much covers everything? Hope helps.
https://www.telegraph.co.uk/money/c...ants-sell-house-can-avoid-using-estate-agent/

Very Useful for looking over the figures but doesn't address my concern to what is determined as 'market value'. Looking at my previous example, the valuations by the estate agents are often inflated and 'sellers' tend to accept a lower offer for a quick sale, and solicitors would just accept the lower price as the norm. How much 'discount' off the £300k would be accepted as the norm when selling to family?

 

[Ian H]

Surely you can sell you house for whatever price you want to whoever you want?

 

[sodthisforfun]

Very Useful for looking over the figures but doesn't address my concern to what is determined as 'market value'. Looking at my previous example, the valuations by the estate agents are often inflated and 'sellers' tend to accept a lower offer for a quick sale, and solicitors would just accept the lower price as the norm. How much 'discount' off the £300k would be accepted as the norm when selling to family?

Estate agent I should imagine is the only prices you can go on, I can't think of anyone else who values homes. Get 3 quotes, best of 3?! You could look at similar properties that have sold nearby recently too as a guide. At least your daughter and you won't be paying them silly amounts if you do sell privately.

 

[EFLImpudence]

It surely doesn't make any difference what price you sell to your daughter, does it?

If HMRC disagree and "catch you" she will only have to pay whatever she would have had to pay anyway, won't she?



Isn't it like people saying they won't do overtime because it all goes in tax? No it doesn't.

 

[Ian H]

But if your house is valued at £200,000 your welcome to sell it for £300,000. HMRC don’t look for you then do they?

 

[EFLImpudence]

No, but it is inheritance tax that is being worried about.