enoch

Member
Guidelines of Buying property in Turkey
My husband is gifting my daughter a small plot of land, with all relevant tapu. There is already an occupieda dwelling on the land, could she charge rent? The occupants don't have a tapu, but built the property themselves.

I mentioned this gifting sometime ago but did not look into it, if you could update me on procedures I would be grateful, thanks in advance.
 

timmillea

New Member
Guidelines of Buying property in Turkey
I bought and sold six properties, built a small apartment complex and ran an estate agency in Turkey. I have been through the mill! I agree with all the points in the opening post. Having had my fingers burnt, I am happy to answer any questions about buying or selling property in Turkey, from a British ex-pat's point of view. T.
 

enoch

Member
Guidelines of Buying property in Turkey
I bought and sold six properties, built a small apartment complex and ran an estate agency in Turkey. I have been through the mill! I agree with all the points in the opening post. Having had my fingers burnt, I am happy to answer any questions about buying or selling property in Turkey, from a British ex-pat's point of view. T.
What do you know about gifting a property to a member of your family
 

Kanga

Member
Guidelines of Buying property in Turkey
If you have a potential inheritance tax liability be careful about gifting. If you continue to use, benefit from, or enjoy the property in any way after gifting it will still be included in the value of your estate because you have not severed all ties with it.
 

enoch

Member
Guidelines of Buying property in Turkey
If you have a potential inheritance tax liability be careful about gifting. If you continue to use, benefit from, or enjoy the property in any way after gifting it will still be included in the value of your estate because you have not severed all ties with it.
Would things be different if you paid a rent?
 

Kanga

Member
Guidelines of Buying property in Turkey
Would things be different if you paid a rent?
Yes, but it has to be a market rate with payments going to the new 'owners' who may pay income tax on it (depending on their income etc from elsewhere.) Regular accounts will have to given to HMRC as with any rental property, and there should be a proper tenancy agreement.
From a tax point of view, in UK you can gift up to £325K (that's the nil-rate for IHT) without tax, but if you give away anything over that value there's a 20% lifetime capital transfer tax to pay. If you gift the full 325k you have to wait 7 yrs and a day before you can make any more gifts to children, other than the annual allowances, that's £3kpa or slightly more on marriage.
Although this can work well, if the owners were to go bankrupt, get divorced, or one/both die, there could be a real problem because your tenancy would have to end. I once had a case where the parents had given half a house to a son, and when my client divorced him he had to include the value of his share of the house as part of his assets, much to his fury. Heh heh!
Extreme case, but if your children died and left their assets to their children, and they were under age 18, there could be even more complications.
Personally I'd not relinquish control of any assets, but cover a potential tax bill with life assurance written in trust, as this would pay out without waiting for probate, to the named trustees. Same if you need longterm care, let them have the house and replace it with cash from a life policy.
 

Mushroom

Member
Guidelines of Buying property in Turkey
My and the boss became 'tenants in common' many years ago. which as far as I am aware makes it more difficult for any agency to try to make us sell up to pay for such things as care homes as we don't own the house jointly but own half each.
Please correct me if I am wrong on that one.
I've often wondered if that would allow one of us to gift one half to the kids and what the implications might be?
I've also looked at the idea of getting my youngest daughter on the property market (her older sister is already on it) by giving her a loan to buy somewhere and to pay us back over the years instead of us getting bugger all interest and her having a mortgage.
Would HMRC have any say in it as we haven't gifted it, we have loaned it and it would be contractual.
Anyone tried that?
 

Kanga

Member
Guidelines of Buying property in Turkey
My and the boss became 'tenants in common' many years ago. which as far as I am aware makes it more difficult for any agency to try to make us sell up to pay for such things as care homes as we don't own the house jointly but own half each.
Please correct me if I am wrong on that one.
I've often wondered if that would allow one of us to gift one half to the kids and what the implications might be?
I've also looked at the idea of getting my youngest daughter on the property market (her older sister is already on it) by giving her a loan to buy somewhere and to pay us back over the years instead of us getting bugger all interest and her having a mortgage.
Would HMRC have any say in it as we haven't gifted it, we have loaned it and it would be contractual.
Anyone tried that?
Tenants in common means that you each own the half of the property and can bequeath it separately, unlike owning as joint tenants which means a survivor inherits automatically. It also means that if you aren't married and haven't made a will, if one of you dies their share of the property will go in line with intestacy rules and you may have problems. Ref care, they can simply place a charge on the patient's half of the property to cover costs, and chase the debt after death, so it's not bullet proof.

Give half to the kids? fine but if they don't live there and you sell, they will have a capital gains liability on their share. . . They will also not benefit from any 'first time buyer' government schemes as they are already a homeowner. . .
There are lenders who will help with parental contributions etc, it's a specialist market, I believe Barclays Bank is one, but I'm not a mortgage expert. Another lender will allow grand/parents to leave capital on deposit where it's still accessible, and offset that against the loan, which is really useful. You need to use a specialist mortgage broker. They're worth it.

You can do a private mortgage agreement with anyone; we did that once with a buyer who couldn't raise the full purchase price and needed to buy in a hurry. I also had clients who fell in love with a house but couldn't get a mortgage because of the state of it; their aunt did a private legal agreement which worked well for all parties. Any solicitor can draw up the agreement. again, where you get interest you have to declare it to HMRC.
If you gift a deposit to a child make sure that if s/he's buying with a partner your deposit gift is ringfenced against any split between them. Again, a solicitor can do this with the conveyancing deed, it's quite common where couples aren't married.
 

Mushroom

Member
Guidelines of Buying property in Turkey
Thanks Kanga.
Plenty to think about.
I don't like the way that HMRC tells us what we can or can't do with our own money/property re- gifting because I have no recollection of them giving me any in the first place !! It was always the other way around.
I can see things getting worse, not better.
 

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