Posted on 10 May 2012 by Anna
I am single, female 64 with one son, 25 trying to build his own business and has small income of £12K a year. I want to help him and mitigate IHT. I have a house valued 650K with 100K int only mortgage. I want to gift my house to him (7 year rule shld not be a problem). Will the mortgage coy allow me to transfer deeds to his name? Can I be guarantor for mortgage which only has 6 years to run. I have funds to pay off now but have been advised not to. Also have a buy to let, valued 650K with a 260K mortgage.
Your lender may allow you to transfer the property to your son's name and act as a guarantor, but this will depend on you showing that you have sufficient income to support the mortgage until the end of it's term. I realise that you already service the mortgage and it seems ridiculous that your lender could decide you can not afford it, they are however bound by new regulations to ensure any new mortgage arrangement is affordable.
Whilst we can not give tax advice I can refer you to the Inheritance Tax section of the Government website DirectGov. Here you will see that there is still a potential tax liability 7 years after passing on a property: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/InheritanceTaxEstatesAndTrusts/InheritanceTaxwhenpassingonmoneyorproperty/DG_179363
I have passed you details to our in house solicitors Rollingson's so that they can give you personal advice and they will be in contact.
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