Can I buy property for a child under the age of 18?
Question We are considering buying a property, which will be let. Is there a way to buy this property for a child who is 13. Is it possible to put it in some form of trust for your child in order to decrease the tax burden. For example CGT tax etc.
Answer - Can A Minor Own Property in the UK?
A minor under the age of 18 cannot own land or property in the UK, so it would have to be owned in trust by trustees, e.g. parents, for the beneficial ownership of the 13-year-old.
Any asset owned by a child under 18 and unmarried, derived from the property of the parents that produces income of more than £100 per year, is taxed on the parents as the parents income.
However this doesn't apply for CGT purposes.
Bare Trusts for Property Owners Under 18
One possible solution is to create a ‘bare’ trust. A ‘Bare’ trust can be created where that the child is the beneficial owner, and the parents are the legal owners who hold the property effectively as nominees. When the property is sold it will be taxed only on the child (who will have their own CGT annual exemption, and perhaps lower tax bands - if they don't have much other income) and not on the parents.
But it must be remembered that the child cannot be prevented from having the property put into his own legal ownership at age 18.
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