Gifting property to children

Hi! Planning ahead and would like to seek advice. Can I gift property to my children? This entails transferring the title or ownership of the property from my name to child's name. Is this just a simple transfer of name via gift deed, or is this a sale process? Do I have to pay stamp duty for the transfer of title? How about CGT? What other considerations are there? What's the difference in gifting this while I'm alive vs. gifting it as part of inheritance? Pros and cons? Is there inheritance tax that my child would have to pay or do they get the property outright with change of name on title? I'm sorry...lots of questions? I tried to look for information, but things are not clear. Many thanks for your time. Or any leads would be appreciated.

 

You want to talk to a lawyer specialising in estate planning. Is the child over 18?

other than stamp duty and cgt, you want to understand future tax implications (impact of testamentary trust?) and asset protection (divorce etc).

 

Yes, full market value (valuation is required but you might get away with an appraisal).

Yes, at market value. Valuation required for related party transactions.

Asset protection. Loss of FHB incentives.

Inheritance via your will can be directed to a testimentary trust or direct ownership without costs other than probate. If transfer occurs while you are still alive, then costs are unavoidable.

 

Of course you can gift anything to anybody, but special precautions if beneficiary is under 18. If not , it can be a great option.

However, there will be stamp duty to be paid on the sale/transfer at market value.

Capital gain will depend on the market value of the sale/transfer. But that will be the current owner's cost or if deceased the estate's cost.

Tricky to do as after you are deceased and I do not believe there are any extra taxes, but any CGT will still be need to paid by the estate.

If you are not reliant on a pension and in a financial position to gift whilst you are still alive this is the best option IMO as you get the satisfaction of seeing the gift realised without complicating things downstream.

 

Yes

If it is a gift you wouldn't be selling it and if you are selling it it wouldn't be a gift

Not as transferer but the transferee will - the child

CGT event - on the market value

Too many to list

No stamp duty or CGT on transfers because of death

not in Australia

As a lawyer specialising in this sort of thing I can say - don't gift!

 

see
Tax Tip 487: Instead of Gifting Sell Property at Market Value with a Gift Back of Cash Tax Tip 487: Instead of Gifting Sell Property at Market Value with a Gift Back of Cash

 

There are also issues a legal adviser will need to advise on such as how the transfer may fail Family Law purposes or be suject to clawback on bankruptcy etc

 

Also be mindful of the social security and aged care implications. It could exceed the allowable gifting limits and be treated as a deprived asset which still counts as a financial asset for Age Pension and Aged Care means testing.

 

if PPOR, sell tax free and given them the cash?

 

what if they die the next day?