Quizzes & Puzzles8 mins ago
Profit On House Sale
If I sell my home and give the profits to my children will I (or they) be taxed? It is not a second home by the way.
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I obviously don't know your age/health or your overall financial circumstances.
But if at some point you subsequently needed to go into residential care, you could be regarded as having deliberately divested yourself of assets - which would affect any benefits you thought you might receive.
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But if at some point you subsequently needed to go into residential care, you could be regarded as having deliberately divested yourself of assets - which would affect any benefits you thought you might receive.
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Actually you can give what you want to who you want provided that you live for 7 years after the gift.
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There is no tax to pay by you on the sale of your home in these circumstances. There is no tax levied on a gift. The recipient is not taxed on the gift.
Tax only becomes an issue for the recipient if the money is saved as interest is taxable (beyond £1000 pa) and provided the recipient's total income makes them a tax payer. A parent money to their child/children can also be liable for income tax on savings in the child's name if these exceed £100 a year.
There can be Inheritance Tax implications if you die within 7 years as others have said, but it is the Estate that pays the IHT not the children (although the effect can be the same).
It can also be seen a s deprivation of capital if you seek means tested benefits or want help with care home costs.
I read it that you would be giving the profits to the children but you would be retaining an amount equal to your mortgage or the purchase price, so it would leave you with the means to rent or buy somewhere
Tax only becomes an issue for the recipient if the money is saved as interest is taxable (beyond £1000 pa) and provided the recipient's total income makes them a tax payer. A parent money to their child/children can also be liable for income tax on savings in the child's name if these exceed £100 a year.
There can be Inheritance Tax implications if you die within 7 years as others have said, but it is the Estate that pays the IHT not the children (although the effect can be the same).
It can also be seen a s deprivation of capital if you seek means tested benefits or want help with care home costs.
I read it that you would be giving the profits to the children but you would be retaining an amount equal to your mortgage or the purchase price, so it would leave you with the means to rent or buy somewhere
Barmaid if she comes along can mark the answers so far
I dont think they are very good
the source by the way DOES affect the position
first of all I am nt sure what you mean by profit
Sell housey and get £200k ( no tax due on transaction as it is your first house )
use 100k for a small house ( in er Cleethorpes or Grimsby otherwise telephone box ) still no tax specifically CGT
give the surplus left over ( I think your profit ) to the kids
NO immediate tax for you or the kids
BUT In the event of your death there could be a charge
First of all you have to have used up your IHT allowance ( nil rate band) of £325 000 - if your unreduced estate is smaller than that you can stop reading at this point
if you have used up the nil rate band then the gift of the £100k will be taxed but at a reduced rate under the seven year rule which everyone knows about. The £100k isnt reduced - the tax rate is reduced
see here
http://
If you give another say £75k to the same kids then the clock is reset to the date of the second transfer.
http://
Everyone knows that you cant tax efficiently transfer your house to your dear kids and still live in it ( goes against the retention of benefit /interest in possession rule ) - however you also cant live in the house they buy with the 100k ( or 175k) - pre owned asset rule
and that is about it
I have given you some good advice - do you want to send me a cheque for fifty quid ?
o and best answer to 3T he deserves it.
I dont think they are very good
the source by the way DOES affect the position
first of all I am nt sure what you mean by profit
Sell housey and get £200k ( no tax due on transaction as it is your first house )
use 100k for a small house ( in er Cleethorpes or Grimsby otherwise telephone box ) still no tax specifically CGT
give the surplus left over ( I think your profit ) to the kids
NO immediate tax for you or the kids
BUT In the event of your death there could be a charge
First of all you have to have used up your IHT allowance ( nil rate band) of £325 000 - if your unreduced estate is smaller than that you can stop reading at this point
if you have used up the nil rate band then the gift of the £100k will be taxed but at a reduced rate under the seven year rule which everyone knows about. The £100k isnt reduced - the tax rate is reduced
see here
http://
If you give another say £75k to the same kids then the clock is reset to the date of the second transfer.
http://
Everyone knows that you cant tax efficiently transfer your house to your dear kids and still live in it ( goes against the retention of benefit /interest in possession rule ) - however you also cant live in the house they buy with the 100k ( or 175k) - pre owned asset rule
and that is about it
I have given you some good advice - do you want to send me a cheque for fifty quid ?
o and best answer to 3T he deserves it.
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