Property question - transferring mortgage from parents to me

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Little pecker
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So I don't know the rules around this but essentially if my parents had a B2L property in their name (interest only) that I wanted to own, is it possible to transfer over the property to my name with me turning it into a repayment mortgage without any significant costs?

For example, lets' say the property was bought for 300k, remortgaged to 400k and current market value is 600k.

Is there any way that I could take over the 400k mortgage (or buy it from them), pay a depo and turn it into a repayment for myself without significant cost to them, will they have to pay CGT and will they be allowed to 'sell' it to me at a discounted price in comparison to the market.

I'm probably not providing all the relevant details so apologies in advance but will follow-up.
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Reue
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(Original post by Little pecker)
So I don't know the rules around this but essentially if my parents had a B2L property in their name (interest only) that I wanted to own, is it possible to transfer over the property to my name with me turning it into a repayment mortgage without any significant costs?

For example, lets' say the property was bought for 300k, remortgaged to 400k and current market value is 600k.

Is there any way that I could take over the 400k mortgage (or buy it from them), pay a depo and turn it into a repayment for myself without significant cost to them, will they have to pay CGT and will they be allowed to 'sell' it to me at a discounted price in comparison to the market.

I'm probably not providing all the relevant details so apologies in advance but will follow-up.
Find a mortgage broker and get professional advice. www.unbiased.co.uk
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martin7
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(Original post by Little pecker)
So I don't know the rules around this but essentially if my parents had a B2L property in their name (interest only) that I wanted to own, is it possible to transfer over the property to my name with me turning it into a repayment mortgage without any significant costs?

For example, lets' say the property was bought for 300k, remortgaged to 400k and current market value is 600k.

Is there any way that I could take over the 400k mortgage (or buy it from them), pay a depo and turn it into a repayment for myself without significant cost to them, will they have to pay CGT and will they be allowed to 'sell' it to me at a discounted price in comparison to the market.

I'm probably not providing all the relevant details so apologies in advance but will follow-up.
Given the sums of money involved, I would strongly recommend that you get proper paid-for legal and financial advice from an appropriate qualified person.

From my (non-qualified) perspective:

What are the tax repercussions? If they transfer it to you at below market price, are there tax repercussions for them? Or for you? Consider things like CGT (capital gains tax), IHT (inheritance tax). If they are older people, or might need social care, would the transaction count as a deliberate deprivation of assets?

With regard to the mortgage, I suspect you'd need to take out your own mortgage and your parents repay the mortgage they've taken out. I think it's unlikely that you can just transfer it, as for the mortgage lender there would be a change in counterparty -- they've lent on their assessment of your parents' creditworthiness and not on the basis of yours. You would need to show that you have the ability to make the repayments based on your income, and that this is affordable for you even if the mortgage interest rate were to rise in the future.
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Reality Check
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(Original post by Little pecker)
So I don't know the rules around this but essentially if my parents had a B2L property in their name (interest only) that I wanted to own, is it possible to transfer over the property to my name with me turning it into a repayment mortgage without any significant costs?

For example, lets' say the property was bought for 300k, remortgaged to 400k and current market value is 600k.

Is there any way that I could take over the 400k mortgage (or buy it from them), pay a depo and turn it into a repayment for myself without significant cost to them, will they have to pay CGT and will they be allowed to 'sell' it to me at a discounted price in comparison to the market.

I'm probably not providing all the relevant details so apologies in advance but will follow-up.
Reue's advice is sound - this is a complicated area, and you'd need professional advice on it. You can't 'transfer' a mortgage, as you aren't named on the current one, and it's a BTL anyway. Your parents would have to sell the house to you, and you would seek a standard repayment mortgage for the value (minus the deposit).

Yes, your parents could sell the property to you for whatever amount they chose, but they would have to pay CGT upon the sale and couldn't minimise this by conducting the transaction at significant undervalue - the CGT would be based on the market value of the property.
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Little pecker
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(Original post by martin7)
Given the sums of money involved, I would strongly recommend that you get proper paid-for legal and financial advice from an appropriate qualified person.

From my (non-qualified) perspective:

What are the tax repercussions? If they transfer it to you at below market price, are there tax repercussions for them? Or for you? Consider things like CGT (capital gains tax), IHT (inheritance tax). If they are older people, or might need social care, would the transaction count as a deliberate deprivation of assets?

With regard to the mortgage, I suspect you'd need to take out your own mortgage and your parents repay the mortgage they've taken out. I think it's unlikely that you can just transfer it, as for the mortgage lender there would be a change in counterparty -- they've lent on their assessment of your parents' creditworthiness and not on the basis of yours. You would need to show that you have the ability to make the repayments based on your income, and that this is affordable for you even if the mortgage interest rate were to rise in the future.
Cheers,

Yeh for sure I’ll speak to a pro just wanted to understand if there were any obvious issues with the idea off the bat before pushing forward.

Reality Check - wasn’t aware cgt was on market and not transaction value, thanks.
Last edited by Little pecker; 1 month ago
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Reality Check
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(Original post by Little pecker)
Cheers,

Yeh for sure I’ll speak to a pro just wanted to understand if there were any obvious issues with the idea off the bat before pushing forward.

Reality Check - wasn’t aware cgt was on market and not transaction value, thanks.
No worries Unfortunately, the Revenue has closed that loophole a while ago:
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Kutie Karen
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This would be tax headache for you and your parents. You probably need to get your parents to sell it at the current market price and get a mortgage in your own name although it might be a struggle with the figures you are quoting. Good luck.
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