Transfer ownership of property but keep rental income

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Feemar5

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We have a second property which has been rented for some years and the mortgage is now fully paid. Property is registered with PRTB and all taxes have been paid. We now want to transfer the property to our son but would like to keep the rental income as he is working away and is not in a position to look after the property. Can this be done? Would appreciate any advice.
 
The answer is that it can be done but with tax consequences. There is specific anti-avoidance to deal with this issue and the tax treatment falls into income tax. I'd suggest you talk to a tax adviser, or an accountant with a tax expertise, on this matter first as it can be complex. Can ask an estate agent to do this on his behalf or look after it yourself - it would avoid the complex tax issues of splitting the property and the rental stream.
 
Hi Bronte - legal advice is yes that can be done but I would have to keep lifetime interest in the property. To transfer property now I would have to pay any CGT tax due and son would have to pay stamp duty at 1%. Also we would have to have two solicitors so legal fees could be double. If he receives property as inheritance there would be no tax or duty as value is under the threshold.
 
So are you going to do it? Doesn’t seem to make sense if the benefit(rent) is coming to you?
 
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