Allowing family members to live in property without rent?

by Readers Question

9:42 AM, 4th August 2020
About 3 months ago

Allowing family members to live in property without rent?

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Allowing family members to live in property without rent?

I was wondering what would be the status of a property that the owner allowed family members, ie adult offspring, siblings, or nephews/nieces, to live in without any commercial consideration? That is, with no rent payment.

I understand this would be a licence to occupy rather than a tenancy. How would the property be treated if the area were to fall under selective licensing at a later date?

Also, what would be the position with HMRC? Since the owner was not living in the property, I assume CGT would apply. However, since no rent was being paid what would HMRC’s position be on income?

Many thanks

Frederick


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Comments

Frederick Morrow-Ahmed

16:44 PM, 15th August 2020
About 2 months ago

Reply to the comment left by Graham Bowcock at 04/08/2020 - 13:12
Hi Graham,

Thank you for the additional information. As you rightly point out, to be an AST it has to lie within the AST rent envelope, which is below £100,000/a and above £250/a (£1000/a in London). If it is outside this envelope with say a single relative living there and selective licensing comes into force I am wondering whether the council would have the right to demand a licence for this. I would presume, not.

Anyway, thanks for your comments

Frederick Morrow-Ahmed

17:04 PM, 15th August 2020
About 2 months ago

Reply to the comment left by Jo Westlake at 04/08/2020 - 22:26
Hello Jo,

Thank you for your comment. I really do admire how well you have managed to bring up your sons and that they listen to you. I wish I could say the same. In my case, it's a question of wanting to have someone take the property off my hands. Hoping the relative can reach the stage where the property can be gifted to them so I can be left in peace.

Anyway, thanks for your suggestion

Frederick Morrow-Ahmed

17:34 PM, 15th August 2020
About 2 months ago

Reply to the comment left by SimonP SimonP at 08/08/2020 - 08:12
Hi Simon, thanks for the very useful information. Best regards

Frederick Morrow-Ahmed

17:55 PM, 15th August 2020
About 2 months ago

Thank you to everyone who has commented and made useful suggestions. Appreciated. It's was a question of getting out of being a landlord. It's now a mugs game. Many tenants lived in a lovely place close to tube at very low rents. I can't remember which piece of imbecile legislation was the last straw, they come in so thick and fast. Anyway, all the fabulous tenants of many years standing, some with me for 11 years, were given Section 21s and had to leave. Some of them cried to lose such a good home. Thank you to the politicians. It was a huge pleasure telling the council that I was no longer a landlord and will not be renewing my licence and could they please remove my property from their HMO database. Haven't felt so happy for a long time.

Thank you to everyone for their comments and suggestions

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