Often these transactions involve giving a house or flat to your children or child, or a spouse, though it can be anyone. This can seem as simple as just ‘changing the name on the deeds’, but in practice there is much more to it than that.
When acting in such a transaction, it really must be thought of as a sale or purchase of a property for less than it is worth, or nothing at all. Because of this a separate firm would have to act for the person giving the property to the person taking it in nearly all circumstances. Before entering into such a transaction there are many considerations that must be considered:
- Will Stamp Duty Land Tax be payable or will this trigger a Capital Gains Tax liability?
- If I give the property to two or more people, what happens if one of them decides they want to sell the property?
- Am I going to retain any benefit from the property after I give it away – such as still living there and not paying market rent? If so, will the gift fail?
- Is this going to cause any financial difficulty in the future?
- Will my mortgage company agree?
- Do the parties need to be represented by separate lawyers at different firms?
If you are considering gifting a property or receiving a gift of property, please don’t hesitate to contact us on 020 8771 5254. Our property lawyers will ensure that the transaction is processed correctly and answer any of your questions without the legal jargon. If you wish to retain ownership of the property, please see our page on Transfer of Equity.