House to Rent

We have a house that our daughter is living in. We are thinking of getting her to buy a property and using the rental income from the house to pay her mortgage.
Any issues to consider?
Should I get the house rewired (currently it has rewireable fuses and I know of a borrowed neutral on some wall lights)
Any tips to make it easy?
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On Sun, 28 Apr 2013 21:46:57 GMT DerbyBorn wrote :

For starters, it may be a nice home, but is it a good rental property?
IMO at a minimum you need to replace the fuses with breakers - you don't want to be paying an electrician to turn out on a Sunday to replace a fuse.
If there is gas in the property you'll need a safety certificate
--
Tony Bryer, Greentram: 'Software to build on',
Melbourne, Australia www.greentram.com
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Who owns the existing property?
If you do then if you rent that you'll be taxed on the income from that.
I'd speak to an accountant first if I were you.
OTOH I might be totally wrong on this so uk.accountancy is that way->..

You'll need energy ,leccy inspection certs and most important a gas cert. if it uses Gas..

--
Tony Sayer


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On 29/04/2013 00:27, tony sayer wrote:

+1

An electric one isn't compulsory actually... that said; for sure the landlord is responsible for the 'electrical safety' of his tenants, and the best way of covering your backside on that front is indeed to have an inspection done.
--
David

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DerbyBorn wrote:

She will have to declare the rental income to both the tax man and the mortgage provider.
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Tciao for Now!

John.
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On Mon, 29 Apr 2013 05:34:59 +0100, John Williamson wrote:

This has the potential to be quite a minefield from the tax point of view. I suggest you talk to a Tax Accountant and maybe a solicitor.

Which mortgage provider? The one for the new house she is living in or the one for the old house she is renting out (but isn't hers...)
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wrote:

ing

her

Why? It is not her income.
The OP can make IHT exempt gifts out of income if it does not affect their standard of living. See http://www.hmrc.gov.uk/inheritancetax/pass-mo ney-property/exempt-gifts.htm
Stil best to get profesional advice, however.
MBQ
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On 29/04/2013 10:26, Man at B&Q wrote:

DerbyBorn will have to declare it. What is worse is that as the daughter has no right to it, her mortgage providers won't take it into account in assessing how much they can lend her.
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tting

ay her

We don't know that she cannot afford the mortgage for the new house in her own right. DB could act as a guarantor.
MBQ
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On 29/04/2013 11:43, Man at B&Q wrote:

True, but DB says "We thought of putting it on the rental market and having the rental payments passed over to her so she could pay a mortgage. (She and husband are in low paid jobs)."
It's so difficult to advise based on half the info and vague hints. I see it from the OP's POV too, as he doesn't know what info is relevant.
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On 28/04/2013 22:46, DerbyBorn wrote:

Sounds like potential tax issues there - can you expand a bit on who owns and lives in what properties? Is this involving gifting cash to your daughter? loaning it? etc?

There's a very good newbie landlord guide at: http://tinyurl.com/bwjnhmj or <http://forums.moneysavingexpert.com/showpost.php?pA160642&postcount >
--
David

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On Sun, 28 Apr 2013 21:46:57 +0000, DerbyBorn wrote:

Is the fact that you have a property where your daughter currently lives completely irrelevant to this question?
You don't say that you intend to sell this house to your daughter, or that you plan to sell this house to help fund the new house.
You merely say that "We are thinking of getting her to buy a property".
No mention of helping her in any way.
As with any rental property it is advisable to make sure that everything is sound before letting, because maintenance with tenants in the property is always a pain. So check for anything that is out of date and/or looking tired and consider replacing it prior to rental. Certainly make sure that there isn't anything potentially dangerous such as wiring that has deteriorated through age.
One area that you may need to consider - the rental rules, terms, regulations etc. are different if the landlord is living on the premises.
Apart from that, I would assume that she would need a buy-to-let mortgage because normal mortgages do not allow renting.
This is not based on personal income but on (projected) income from the property. Which can be a good or a bad thing, depending on how the sums work out. Also it can obviously affect how much deposit is required.
I am assuming that she cannot afford to buy her own property at the moment, and this is a strategy to get her started on the property ladder (and possibly out of your house :-) ).
A clearer idea of what kind of in formation you are seeking would be helpful.
Are you looking for DIY advice on preparing a property for rental?
Are you looking for advice from landlords about how to set about renting?
Cheers
Dave R
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Thanks - the house belongs to my wife. There is no mortgage on it. Our daughter lives in it rent free. She is now married and the couple are wanting somewhere bigger. We want to help but don't just want to hand over the house. We thought of putting it on the rental market and having the rental payments passed over to her so she could pay a mortgage. (She and husband are in low paid jobs). Eventually she would inherit the house - but we don't want to pass it over now.
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On Mon, 29 Apr 2013 08:19:10 GMT, DerbyBorn wrote:

Boom.

BOOM.

BOOM!!

Lots of mines going off...
You really *do* need to talk to a solicitor. If you wait until it becomes an inheritance it becomes part of the estate and could push the value of the estate into Inheritance Tax. A lot will depend on how you and your wife are going to handle your IHT allowances and what other assets you have that end up in a combined or individual estates.
HMR&C take a dim view of a simple transfer of an asset but it might still be possible to do that combined with taper relief so that after 7 years the tax (Capital Gains and IHT) implications disappear. The rules keep changing to try and prevent such gifts, though in this case it might be a bit simpler as your wife is not living in the house so isn't getting any "benefit" from it.
So talk to your daughter and son-in-law, see what they would be happy with, the get professional advice from a solicitor that specialises in Tax/Probate affairs. Every one involved needs a Will so that the intestate defaults don't mess up the planning... Don't make *any* assumptions about the order of peoples death.
--
Cheers
Dave.
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On Mon, 29 Apr 2013 10:03:27 +0100 (BST)

snip

Seconded, on all counts. Only those who specialise in this can understand all the implications, and as they change. It is money very well spent, even if it seems expensive, it's good value.
--
Davey.

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On Mon, 29 Apr 2013 10:03:27 +0100 (BST), Dave Liquorice wrote:

7

s

t

Somemthing else the house isn't your daughters to rent out but your wifes. Your wife could rent it out and get taxable income from it but ho w you could pass that money to your daughter to help pay her mortgage on another property I don't know. You can't simply "gift" it to her or HMR& C will get upset, well you can gift her up to £3,000 a year but that is the your complete "gift allowance". Not sure of the details, I think everyon e can "give away" up to £3k/year without tax implications for the recpie nts but it might be everyone can receive up to £3k/year, subtle be importa nt difference. It's this allowance that allows (small...) birthday/christmas/wedding gifts etc without having to tell HMR&C about
them.
--
Cheers
Dave.
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Cash
--
bert

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On Tue, 30 Apr 2013 21:09:20 +0100, bert wrote:

t


ght

I hear what you are saying but if the money enters the DB household via
BACS or a cheque and is withdrawn as cash and there is nothing to show for it in DBs household but the mortage of daughter gets paid without them having enoough apparant income...
--
Cheers
Dave.
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Whatever.
--
bert

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wrote:

he

The OP can also make unlimited regular IHT exempt gifts (e.g. monthly mortgage payments) out of income if it does not affect their standard of living. See http://www.hmrc.gov.uk/inheritancetax/pass-mo ney-property/exempt-gift...

ts
There are no recipient tax implications for financial gifts.

t

No, they are covered by a separate alowance as far as IHT is concerned, as are gifts on marriage.
MBQ
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