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Buying A House For £1

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My mate's Dad is self employed and has had some problems with a large supplier letting him down on a big order, so he has taken them to court. He has personal liability in the business and is understandably concerned about retaining his house if he loses the case. For protection, he wants to sell the house to my mate (who is not a homeowner yet) for £1 and then buy it back for £1 when the case is over.

Now this sounds too simple to me! For a start, is this legal?

If it is above board, does anyone know what the implications of this are and will there be any penalties to either of them like Capital Gains tax if the sale goes ahead?

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I'm not leal eagle but I suspect that if the case with the supplier ever went through the whole legal process and your mates dad was liable for any losses or costs the transaction of selling the house would be viewed as an attempt to hide assets and would therefore be viewed as illegal.

G-Man

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About market rates. I am very angry that 'market rates' determin how much your propertiy is worth and

how much tax you should pay on your property. If my parents wanted to give me their house I would have to pay inheritence tax over a limit that SOMEONE else has set!!!! For a price a group other ordinary home owners have set.

If people are allowed to run arround and value their own house and place it on the market for a ridiculous asking price... and put the market and peoples lives in danger... and if that pushis up the overall 'value' of a house then it should be JUST as legal for a parent to value their house at GBP 1.00 and sell it to their child.

Grrrrrrr. :angry: In both cases the owner is making up a price.

I don't like other people haveing more control over valuing my property.

Grrrrrr. :angry:

I hope the blood bath being experience in the stock market today (as reported by SKY news) is a sign of things to come to the houseing market.

CAS.

p.s. After all there is no formal qualification needed to be an estate agent and value a property so the

government cant weasle out of my argument.

Anyone know a lawyer with time on their hands to take this up?

Edited by coolaftershave

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If my parents wanted to give me their house I would have to pay inheritence tax over a limit that SOMEONE else has set!!!! For a price a group other ordinary home owners have set.

If they live for another 7 years you don't have to pay a penny of inheritance tax on the house. I believe that you also get relief based on how many years they do live.

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stamp duty would still be charged at market rates i believe

If this pratice was legal, every last mansion in the country will show up in the land registry for £1 as the rich will transfer their assets to their children £1 to avoid inhertance tax

nice idea but a little simple - while i don't have much faith in public sector workers - rest assured the taxman is at least smart enough to outwit this 'would be' loophole

unfortunately the tax loopholes tend to be a tad expensive to implement - i.e. moving to one of these tax heavens - sorry but only the ultra rich can exploit the loopholes the rest of us just have to bare it.

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Paradoxically of course, the government are kind of "entitled" to play about with the system in this way. Since property is excluded from CGT, in their eyes they've already gifted you a lot.

It's all very screwed up, basically.

Of course, one shouldn't have to pay CGT or inheritance tax on anything, if I had my way, but hey ho.

Has your mate not go a wife? If he does, he can transfer it into her name.

Take out a civil partnership?

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If they live for another 7 years you don't have to pay a penny of inheritance tax on the house. I believe that you also get relief based on how many years they do live.

Its a big nasty game and we don't know the rules.

Someone is changing them... a decade ago my parents house would not have been taxed at all!!!

the government / banks GAIN ALOT from artificialy inflating house prices.

1) People THINK they are rich. (Stupid)

2) Banks chargind intrest on mortgages get a bigger return.

3) People who would never have had to pay tax on a property or a very smal amount

suddenly have to pay 1000's but have a wage that can not support it.

REVOLUTION! We need one. Im going to try and get support to declare my parents street as an independent

state. Anyone want to joing the Republic of HPC?

I still think because of the above some sort of human rights issue could be used to defend valuing your own home. When you sell your car or any other thing you own... YOU set the price.

If you generate an income / self employed... You set your prices and determine how much wage you get. If you choose to go over you tax allowance you get taxed but you can if you want stay below it.

I am convinced you must be allowed.

CAS.

Edited by coolaftershave

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I assume that he can't sell a house for less than the council tax band that he has been paying.

I believe he can give it to a son/daughter but would then have to live elsewhere. Then in 7 years, as long as he survives 7 years, it would be his offspring's house with no tax implications.

In normal circumstances anyway. Not sure if it would be legal as it may be seen as hiding an asset.

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I assume that he can't sell a house for less than the council tax band that he has been paying.

I believe he can give it to a son/daughter but would then have to live elsewhere. Then in 7 years, as long as he survives 7 years, it would be his offspring's house with no tax implications.

In normal circumstances anyway. Not sure if it would be legal as it may be seen as hiding an asset.

So would this mean that even if house prices were not overvalued but there was mass unemployment, if you wanted to sell and leave the country you would have to wait untill you found a buyer that could afford

to buy (which may be never or so long than any opertunity you have abroad would expire) at the council tax band and you could not legaly accept a quick sell just to flee the sinking ship.

Sounds like a prison.

CAS

p.s. am getting too deep to early in the morning but...

Greed is a definatly a deadly sin... because of it we try to outbid our fellow man for a property

but at the same time we are supporting a system that chokes us ALL financialy/(quality life time).

Strongly beleive the seven deadly sins are not from a god but from a bloke who spotted these things in life and wrote them down in a book to try and warn others on how to live in a good society. He did not

have a HPC website to preach.

Edited by coolaftershave

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So would this mean that even if house prices were not overvalued but there was mass unemployment, if you wanted to sell and leave the country you would have to wait untill you found a buyer that could afford

to buy (which may be never or so long than any opertunity you have abroad would expire) at the council tax band and you could not legaly accept a quick sell just to flee the sinking ship.

Sounds like a prison.

CAS

The banding system is always well behind real time. My place is band D, which for where I live is £68,001 to £88,000. My place is actually worth around 2 x the upper limit.

Doesn't seem so bad now does it :D

This doesn't mean I am right but who can argue that a property is worth less than the bottom limit of the council tax they have been paying.

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The banding system is always well behind real time. My place is band D, which for where I live is £68,001 to £88,000. My place is actually worth around 2 x the upper limit.

Doesn't seem so bad now does it :D

This doesn't mean I am right but who can argue that a property is worth less than the bottom limit of the council tax they have been paying.

well in this case we should be able to pass on property to kidds at the lower band value. Eh?

Still avoid tax.

Edited by coolaftershave

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well in this case we should be able to pass on property to kidds at the lower band value. Eh?

Still avoid tax.

No doubt this was done quite a lot in the past....so the government must have something in place. Otherwise they would lose billions in revenue from stamp duty and inheritance tax.

When I get a chance I will try to find out how a property is valued to calculate inheritence tax. Maybe this will be the real answer.

Could be as simple as an average of x amount EA valuations :huh:

My previous posts were to state what I felt would be the minimum he could sell for. The maximum....that's a different matter.

Edited by enworb

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No doubt this was done quite a lot in the past....so the government must have something in place. Otherwise they would lose billions in revenue from stamp duty and inheritance tax.

When I get a chance I will try to find out how a property is valued to calculate inheritence tax. Maybe this will be the real answer.

Could be as simple as an average of x amount EA valuations :huh:

My previous posts were to state what I felt would be the minimum he could sell for. The maximum....that's a different matter.

Instead of taxing only the houses that are in the upper bands they have now engineered a situation that

nets in the rest of us.

People face being thrown out in to the streets. I know someone (only child) whos only parent died early and they were thrown out! Had to sell up and leave the area / friends behind. Just adds to the sorrow. And if this happend a few years earlyer they would not have had to pay any tax at all.

It makes me angry. VERY angry and there is nothing we can do.

Could be as simple as an average of x amount EA valuations :huh:

But what quallifies an estate agent to do this.

Get 10 of your mates to set up a temporary estatge agency. Submit values.

Get low price. Easy.

Edited by coolaftershave

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Instead of taxing only the houses that are in the upper bands they have now engineered a situation that

nets in the rest of us.

People face being thrown out in to the streets. I know someone (only child) whos only parent died early and they were thrown out! Had to sell up and leave the area / friends behind. Just adds to the sorrow. And if this happend a few years earlyer they would not have had to pay any tax at all.

It makes me angry. VERY angry and there is nothing we can do.

But what quallifies an estate agent to do this.

Get 10 of your mates to set up a temporary estatge agency. Submit values.

Get low price. Easy.

I'm an only child and my Dad owns a house and some land in Nevis, West Indies so I know how you feel.

My Dad wants me to go to Nevis this year. I have a feeling he wants to sign the land over to me now. Personally I would prefer it if he sold his house and built on his land. He retired at 55, nearly 14 years ago. But he absolutely spoils me and doesn't want the tax man taking what he has earned when it could mean myself and my future children having a better quality of life. This is very normal for the West Indian community.

There are loopholes that the Gov keep blocking but at the moment it is possible to avoid/reduce paying tax. But it requires planning and an awful lot of time (7 year rule)

But what quallifies an estate agent to do this.

Get 10 of your mates to set up a temporary estatge agency. Submit values.

Get low price. Easy.

Maybe they have specialist surveyors that cover all regions. By that I mean qualified, not school leaver/unqualified EA's.

Mortgage lenders use only reputable surveyors to evaluate a property. This ensures that they will not lose money if the borrower doesn't keep up with payments and the lender has no option but to sell. Could be similar or the same surveyors

Give me a while and I will find out for sure. So far I am only speculating :D

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So would this mean that even if house prices were not overvalued but there was mass unemployment, if you wanted to sell and leave the country you would have to wait untill you found a buyer that could afford

to buy (which may be never or so long than any opertunity you have abroad would expire) at the council tax band and you could not legaly accept a quick sell just to flee the sinking ship.

Sounds like a prison.

If it was marketed and sold at a (even heavy) discount the government wouldn't have cause to question it.

I think almost any property if on the market for 50 - 60% of it's "real" market value would be snapped up so you would not be stopped getting a quick sale, but this wouldn't be seen as trying to avoid paying stamp duty.

It's only really to put off the lets swap it for £1 boys.

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My mate's Dad is self employed and has had some problems with a large supplier letting him down on a big order, so he has taken them to court. He has personal liability in the business and is understandably concerned about retaining his house if he loses the case. For protection, he wants to sell the house to my mate (who is not a homeowner yet) for £1 and then buy it back for £1 when the case is over.

Now this sounds too simple to me! For a start, is this legal?

If it is above board, does anyone know what the implications of this are and will there be any penalties to either of them like Capital Gains tax if the sale goes ahead?

Would you want to do this? Do you trust your mate not to flip it and piss the money up the wall?

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Would you want to do this? Do you trust your mate not to flip it and piss the money up the wall?

I think the point was it was his mate and his mates Dad. i.e. selling it to his son rather than some random mate...

Pointless in every way, obvious avoidance.

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Thanks for the posts. From what I know, they were expecting to pay for legal costs on top of the £1 transaction, but hadn't budgeted for stamp duty. There are no partners with either family member that have any legal standing.

I don't know if making the house into a gift is an option, as I believe Inheritance Tax is still payable if he stays in the property and does not pay a market rate rent.

Does anyone know of any decent links about the law and hiding assets? I can only find stuff about divorce.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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