My mum died and my dad wants to downsize. I want it to be stress-free for him but I live 500 miles away. Ideally, I would like him to find somewhere to move to, buy it and get him moved and not have to worry about timing the sale of the family home and purchase of the new house. What would be the best way to do this? I would buy the property (in Liverpool) for him but don’t want the second homeowner stamp duty land tax (SDLT) liability. I could give him the money, but then for a period he would be a second homeowner. What would be the tax implications if he gifts me thet family house and I gift him the money to buy a new one, and I immediately sell the family home to give him the proceeds minus the money I gave him?
Arthur Weller replies:
Perhaps you are better off selling his present home and then buying the new house with the sales proceeds. There will obviously not be any extra 3% SDLT if you go down this route; and perhaps he could stay with you temporarily in the intervening period or somewhere else temporarily. If that is not an option, perhaps you could lend him the money to first buy a new home, and then he could sell the old home and repay you. Initially, he will have to pay the extra 3% SDLT, but when he sells his old home within the required time limit, he can claim a refund of that extra 3% SDLT. See HMRC’s Stamp Duty Land Tax manual at SDLTM09800 and SDLTM9809.