Firstly, they wouldn’t qualify for Stamp Duty Land Tax Relief for First-Time Buyers, because firstly, they aren’t intending to live in the property and secondly, it sounds like they already own other property.
If you gift the cash to your son and daughter, there shouldn’t be any Capital Gains Tax to pay on the purchase because cash gifts are exempt from Capital Gains Tax. However, there would be Capital Gains Tax implications should they decide to sell it.
Your son and daughter would need to declare their share of the rental income and expenses on a self assessment tax return each year and pay any tax due.
And finally, if you both survive for another seven years then the gift will be ignored for Inheritance Tax purposes. If you don’t, then the cash gift will effectively be included as part of your estate at the time of death, and could be subject to Inheritance Tax depending on the size of your estate.
Please feel free to contact your local TaxAssist Accountant, who would be happy to discuss your inheritance planning with you and the personal tax matters affecting your children.
By Jo Nockels
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