Will this idea reduce your UK assets?

Texas


Joined: 22/09/2009
Posts: 634

Message Posted:
16/01/2010 08:12

Here's a hypothetical situation.



Lets say I own a £150,000 property in the UK with a £50,000 mortgage on it. Now, if I found someone I could trust, say a family member, could I allow them as an individual put a £100,000 charge on my property?



Therefore I may own a property in the UK, but as there will be no equity, there will be nothing at risk.



This idea could also be a lot cheaper than setting up companies, putting it into a trust. It could also be a lot safer than putting it into someone else's name.

Baspinar Bob


Joined: 15/02/2008
Posts: 618

Message Posted:
16/01/2010 09:02

Texas



You have too much time on your hands, you need to play more poker.



Bob.

nurseawful



Joined: 06/02/2009
Posts: 5934

Message Posted:
16/01/2010 09:07

Sell it to your son / daughter for 1 pence but do it through the lawyers with a separate agreement drawn up between you to say that the property is still yours.



A friend did this when she and her husband divorced as the property is in her name this way he got nothing and 2 years later when she remarried the friend sold it back to her for 2 pence also done through her lawyer!



Whether it is legal or not I don't know but it worked. Incidentally she also sold her furniture the same way so in effect she had nothing to give her hubby when it came to the divorce.



Chris

Rottolover



Joined: 21/06/2009
Posts: 519

Message Posted:
16/01/2010 09:14

Your friend sounds like a nasty piece of work, Chris, doing her poor hubby out of his rightful 50%.

mikecbbr


Joined: 16/01/2010
Posts: 2

Message Posted:
16/01/2010 17:19

Thats called tax evasion folks and Inland revenue see all sales though the land regisrty and whats the point trying not to pay CGT there easier and legal ways, see you Financial Adiser

dublinderm


Joined: 26/09/2009
Posts: 538

Message Posted:
16/01/2010 17:46

Re MGG5:



Mike is absolutely correct 'selling' an asset at a price riduculously below market value will not only attract the attention of the tax authorities, but also the Fraud Squad.



If the diddled hubby mentioned in Msg3 wanted to pursue matters he could probably get the ex jailed.



All our home (Irish) assets are in my wife's name, all TRNC assets are in my name - simple. Let them come after me - a quickee divorce and they can have the overdraft, credit cards bills, etc. There are no tax implications of moving assets between spouses.



If she divorces me for real she would probably get everything anyway, so what the hell!!!



DD

lovingcyprus


Joined: 02/03/2007
Posts: 1272

Message Posted:
16/01/2010 18:09

Before you start talking about tax evasion take a look at the following:-



http://www.hmrc.gov.uk/cgt/property/basics.htm



Texas, I think your plan could work although you would need to run it by a solicitor

walkerscott


Joined: 13/08/2009
Posts: 901

Message Posted:
16/01/2010 18:16

Steve,



If you own the property outright, you may allow anyone to place a reasonable charge against it for whatever exchange of either effort (someone working for you or doing you a service) or for someone lending you money either in bulk or in regular monthly, quarterly or annual amounts.

What you can't do (well you can but you will be taken to task for it by the authorities when they find out) is to let someone have the asset well below current asset value in order to hide assets. This is even illegal between family members. You can however set up a trust, and that does not cost much at all.

In England, Wales and N Ireland the assets of any marital break up are thoroughly investigated unless the couple have an agreement in place. If there are no children then it will be a fair split depending on what pensionable assets are to be split in any divorce.

Even if the property concerned is in one partner's name, it'll all depend on what contribution the other partner has made ..

dublinderm


Joined: 26/09/2009
Posts: 538

Message Posted:
16/01/2010 18:19

Good Post lovingcyprus but what about Stamp Duty?



I do not know the rates in the UK but they can be up to 9% on the 'assessed' value of property exchanged in Ireland.



Evading stamp duty is still tax evasion.



DD

Texas


Joined: 22/09/2009
Posts: 634

Message Posted:
16/01/2010 19:04

As I understand things, you can transfer an asset to a "close relative" for no money/consideration. There is also no Stamp Duty to pay.



As regards to UK Inheritance Tax (IT), I also believe that if the transferee were to die in the first year, full IT would be due on the estate inc the transferred asset. This tax is reduced in proportion every year until seven years have elapsed, then no IT is due on the transferred asset.



I stand (well actually I'm sitting!) to be corrected.

lovingcyprus


Joined: 02/03/2007
Posts: 1272

Message Posted:
16/01/2010 19:35

Texas



You are not correct about IHT here is the situation:-



The current nil rate band is £325,000 if you make a gift of say £200,000 you have in effect only £125,000 of your nil rate band left, so if you pass away within 7 years your nil rate band is effectively £125,000.



Now if you make a gift of say £500,000 to someone you have used your nil rate band of £325,000 and it is the diference of £175,000 that is liable to IHT and this sum is reduced on a sliding scale to nil over 7 years but there is no reduction for the first three years.



These examples assume you are not married.

Aussie


Joined: 17/06/2007
Posts: 657

Message Posted:
16/01/2010 23:18

Texas



If you just had a bank loan with a redraw facility set up at 80-90% of the properties value you could pay most of it off and redraw the money when you considered yourself at risk. Bankruptcy laws might try to claw back the amount you reborrowed and then transferred overseas but if you were then living in an offshore jurisdiction this may not bother you.



Aussie

sporty


Joined: 06/12/2007
Posts: 685

Message Posted:
17/01/2010 10:30

question for one of you boffins-if say orams lose on tuesday,is it possible for one of a married couple,eg,the husband puts a nc property in his name,then all of the uk assets that are held in joint names,put into the wifes name?i think im right in saying uk assets can be transferred between spouses in uk with no penalties,also in the case of a later divorce in the uk the husband would be entitled to half the wives assets anyway.

nurseawful



Joined: 06/02/2009
Posts: 5934

Message Posted:
17/01/2010 11:14

Message 4 Rottolover,



Who can blame her she found him in her bed with not one but two females. He thought she was away on a course but when we got there the course had been cancelled so we all came home!!!



He's a very lucky guy that is all she did to him!!!



Chris

zerochlor


Joined: 03/04/2009
Posts: 4024

Message Posted:
17/01/2010 11:31

he sounds a proper geezer. what a way to go! getting trapped in bed with 2 sweeties

paulc


Joined: 11/04/2009
Posts: 182

Message Posted:
17/01/2010 13:46

Hi Steve Thanks for the drinks on Thursday, i look forward to many more

walkerscott


Joined: 13/08/2009
Posts: 901

Message Posted:
17/01/2010 13:56

Re Message 12



The One Account have such a facilty which is great. You can even retain it after you have repaid your mortgage thus always allowing you to draw on it!

ruggy


Joined: 02/05/2009
Posts: 757

Message Posted:
18/01/2010 11:53

Re mess 17. What Bank does the one account

measey


Joined: 07/02/2009
Posts: 1037

Message Posted:
18/01/2010 14:42

Chris. Bit inconsiderate she could have phone him to say she was coming back.



Keith.