I am buying a house and want to use my two sons savings as part of the cash purchase . The reason being to give them a better rate of return on investment than the existing building society interest rates.Their share is 20% of the capital house. The house will be let to provide them income. As one is 14 his interest in the property cannot be recorded on the deeds (The other is 18) so it is suggested I buy the property in my name only and have a trust deed drawn up to register their equity interest. Will the Tax office allow them their capital gain allowance on the house when it is sold if there is a only a deed?Can I allow them all the income or will it be taxed as my income because I am the sole name on the deed?Please helpLynnette
System of Law: England-and-Wales
Solicitors cant advise on tax.
Hi.So long as your use your sons savings in the purchase as well as your own, the rental income can be split between the three of you in whatever proportions you are happy with. It is only married couples who have to split income from jointly held assets on a 50:50 basis or in the actual asset ownership proportions. Take a look here for more information. Your sons are each entitled to a personal allowance to use against their respective shares of the rental income. You should have no problem getting the CGT exemptions for each of your sons as the trust deed is a legal document which will stipulate the actual ownership proportions of the property.Let me know if you have any further queries.TonyTax41094.4838285069
Inc Tax, CGT, Corp Tax, IHT, VAT.