#HouseSwap #TaxEfficient #InheritanceTax
🏡 Considering a house swap with parents? Here’s what to consider:
– Both houses owned outright mortgage free 💰
– Their house worth £800K, mine worth £400K 🏠
– Looking to swap tax efficiently, any ideas? 💡
Here’s a possible solution:
– Consult with a tax professional or solicitor for advice 🧐
– Consider gifting the houses to each other to avoid any tax implications 🎁
– Keep in mind potential inheritance tax implications for the future ⚖️
Have you considered a house swap with your parents before? Share your thoughts and tips below! Let’s help each other out. 🏡💬
You’d have to pay stamp duty on the market value of the property. There’s no way around it, but that is the only tax
The IHT aspect is just if your parents estate including their main home is worth more than 1m, because then if they pass away within the next 4 years, the 400k difference may be brought into the IHT calculation
It’s doable and if both houses are indeed mortgage free you might not even have to pay SDLT.
https://lawhive.co.uk/knowledge-hub/property/tax-implications-of-gifting-property/
There’s wider relationship issues of course – how would they feel if you then sold their existing house and moved into a bigger place miles away? Also, do you have siblings or other likely inheritors of your parents’ estate who would have their own views? How far away are your parents from needing care, could this appear to be a deliberate disposal of assets?
You parents will likey incur a tax charge as this would be deemed a lifetime gift and therefore subject to the chargeable lifetime transfer regime i.e. Capital Gains tax. Immediate* 20% tax charge on the excess value of the gift above £325000 (* actually payable within 60 days of completion) . In addition. you would also incur a bill if your property gift exceeds £325,000 i.e 20% on £75000 assuming your property value is accurate. Only transfers between spouses, or civil partners are exempts from CLT’s, not children.
[https://www.gov.uk/inheritance-tax/passing-on-home](https://www.gov.uk/inheritance-tax/passing-on-home)
Will they live seven years? Just have them sign it over to you.