Hey all. Got a question the STW hive mind might be able to help me with before I need to talk to a solicitor.

So about 10 years ago my parents gave me a step on the property ladder by paying for a small percentage of my new property, at the time it was set up so they retained that percentage as a shared ownership with the intention one day that they would get the percentage back upon sale of the property. Over the course of 10 years situations have changed and they have decided to gift me this percentage. So the question is what are my next steps? Is it a simple process are there any tax implications I should be thinking of?

The transfer should be pretty easy. Fill out a AP1 form which you can download from the .gov website. You’ll also all need to fill out an ID1 form to prove identity. You can then get a solicitor to verify the ID1 form for a fairly small fee a post the lot off to the land registry or you can take it to the land registry in person and only pay the transfer fee (£40). They have regional offices but you will need to book an appointment and all go with passports. Or you can get a solicitor to do the lot if you aren’t comfortable with that.

Not so sure about the tax. I think even if they gift it they will be liable for capital gains tax on the market value. They will both have a cg allowance so it might be under the threshold. Probably too late to split it across two tax years now. If they gift it there is also a potential inheritance tax if they die within 7 years. You should be under the stamp duty threshold.

From memory on a similar case, (a long, long time ago though). If the shared ownership / Parents retained interest in the property was a legal charge against the property (1st or 2nd charge if you have a mortgage). Then that charge needs to be removed through the land registry. Parents then gift you the equity interest they have in the property. There shouldn’t be any tax implications other than Parents surviving 7 years so no inheritance tax issue and there shouldn’t be any Stamp Duty issue (these tax comments are the bits that need checking due to the long time ago comment above)

Thanks a lot both of you that’s a really good start, plenty to go on there.

I suspect there may be capital gains to pay but if so it would depend on the percentage/value.

yup,
I just did an equity transfer last month and what the posters above say is correct.

(if your parents share was under a mortgage then they might have had a stamp duty hit, but it wasn’t, so you don’t)