Transferring property back to myself?

Transferring property back to myself?

9:24 AM, 21st September 2022, About 2 weeks ago 12

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Hello, Can you please advise the best way to transfer my flat back to me now?

In 2005 I bought my first one-bedroom flat for £265,00.00 getting a mortgage of £238,075.00

2007 I got married and bought a new 2-bedroom apartment with my husband for £440,000.00. I had to sell my first one-bedroom flat to get a mortgage on the new apartment.

Because I couldn’t sell, and the property market collapsed I had to transfer this flat to my sister’s name for £238,970.00. She had a mortgage in her name.

My sister stayed in this flat till 2021 and paid interest only on her mortgage. In 2021 my sister bought her house, and she is having similar issues with selling this flat.

In 2022, I want to transfer my first flat back to my name for the same mortgage amount of £239,00.00.

What is the best way?

Navin



Comments

Neil Patterson View Profile

9:29 AM, 21st September 2022, About 2 weeks ago

This would seem a bit of a pickle so please can you tell us all exactly what you did when you transferred ownership to your sister?

At the very least there is Stamp duty, Potentially exempt transfer and deed of gift to consider here.

I would personally make sure you take advice from the solicitor who conducted the original transaction.

Judith Wordsworth

10:50 AM, 21st September 2022, About 2 weeks ago

Transfer? Did you actually sell your flat to your sister? If so then she could sell it to you in the normal way but your income would need to stack up to get a mortgage.

I would wait until the mini budget as there may be something being done about stamp duty.

Olls63

11:01 AM, 21st September 2022, About 2 weeks ago

Have you looked at the CGT implications of these transfers?

Mr Navin Manekporia

11:25 AM, 21st September 2022, About 2 weeks ago

Reply to the comment left by Neil Patterson at 21/09/2022 - 09:29
Yes, my sister paid stamp duty and solicitor's cost same as it was sold to her.

Mr Navin Manekporia

11:30 AM, 21st September 2022, About 2 weeks ago

Reply to the comment left by Olls63 at 21/09/2022 - 11:01
I know I will have to pay the stamp duty but as for CGT, I am thinking of transferring back at the same price as I transferred it to her.

Olls63

12:00 PM, 21st September 2022, About 2 weeks ago

Reply to the comment left by Mr Navin Manekporia at 21/09/2022 - 11:30
You can't choose the value at which you transfer it. You are connected persons, so you have to use the market value.

Simon M

14:54 PM, 21st September 2022, About 2 weeks ago

This is a minefield

If you were to buy it back at less than the current open market value you would be committing fraud, which means it's a serious crime. Your sister would also be at risk for abetting a serious crime.

If a solicitor agreed to act for you they would be in breach of SRA (Solicitor's Regulation Authority) rules - and if it was discovered the penalty for the solicitor is to lose their licence to practice, their livelihood.

Unless the property has an obvious fault then it sounds as if it's simply over-priced for the current market which has been falling. Your sister needs to accept she will get less than she wants.

If someone else offered a similar flat nearby for sale on the open market, how much would you be prepared to pay for it?

Mr Navin Manekporia

15:41 PM, 21st September 2022, About 2 weeks ago

Reply to the comment left by Simon M at 21/09/2022 - 14:54
Many thanks for your response.

Puzzler

17:40 PM, 21st September 2022, About 2 weeks ago

Reply to the comment left by Simon M at 21/09/2022 - 14:54
Buying at less than market value is not fraud in itself, only if you try to pay less tax. It is the market value that determines how much tax to pay.

Mr Navin Manekporia

10:01 AM, 22nd September 2022, About 2 weeks ago

Hi, many thanks for your comment. Not all flats are the same in the block.
Some are bigger and some are smaller, some are refurbished and some are derelict.
What is the best way to find out the actual market value?

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