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Hi everyone,
My brother and sister and I are in the process of receiving a property as a gift from our parents in the hope of avoiding inheritance tax. We have offered to pay the CGT and conveyancing costs for my parents as it seems only fair.
The property is a mortgage free residential property and is currently rented out to my sister who intends to continue living there. She also uses a room in the house as an office for which I believe she receives/ claims back 40% of the rent from her business (seems high to me).* She would like to continue to do this but as she would be part owner would this be viable? I fail to see how she could continue to be considered a tenant as she is now part owner- surely she couldn't pay herself rent? If the business weren't involved she would simply be able to save herself a third of the rent (her share) per month and pay us the remaining two thirds.
Would setting up a private company help and would there be tax implications for that company if one of the owners lived in the property?* Any advice would be greatly received and allow us to gather our thoughts and hopefully understand some options before seeking professional advice.
We are likely to want to mortgage 50% of the property to allow us to put down a hefty deposit on a second property in the near future too. I understand when this happens we may be able to offset rent against mortgage interest but is this also affected by a joint owner living there?
Thanks in advance
Rob
My brother and sister and I are in the process of receiving a property as a gift from our parents in the hope of avoiding inheritance tax. We have offered to pay the CGT and conveyancing costs for my parents as it seems only fair.
The property is a mortgage free residential property and is currently rented out to my sister who intends to continue living there. She also uses a room in the house as an office for which I believe she receives/ claims back 40% of the rent from her business (seems high to me).* She would like to continue to do this but as she would be part owner would this be viable? I fail to see how she could continue to be considered a tenant as she is now part owner- surely she couldn't pay herself rent? If the business weren't involved she would simply be able to save herself a third of the rent (her share) per month and pay us the remaining two thirds.
Would setting up a private company help and would there be tax implications for that company if one of the owners lived in the property?* Any advice would be greatly received and allow us to gather our thoughts and hopefully understand some options before seeking professional advice.
We are likely to want to mortgage 50% of the property to allow us to put down a hefty deposit on a second property in the near future too. I understand when this happens we may be able to offset rent against mortgage interest but is this also affected by a joint owner living there?
Thanks in advance
Rob