Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • diamond dave
    • By diamond dave 17th Mar 17, 10:03 AM
    • 550Posts
    • 355Thanks
    diamond dave
    Lending house deposit
    • #1
    • 17th Mar 17, 10:03 AM
    Lending house deposit 17th Mar 17 at 10:03 AM
    Further to my earlier posts about dd buying a new house - we are in a position to lend/give her a sizeable amount of cash ( 100k). Not worried about getting the money back as she will inherit all if she survives us. Should we just gift this to her and hope that we live another 7 years or should we "loan" to money to her with optional repayments? Is there any legal/tax implications - have looked at loan agreements online and they seem useless.Many thanks.
Page 1
    • sparky130a
    • By sparky130a 17th Mar 17, 10:06 AM
    • 530 Posts
    • 669 Thanks
    sparky130a
    • #2
    • 17th Mar 17, 10:06 AM
    • #2
    • 17th Mar 17, 10:06 AM
    Most lenders would require it to be a gift.
    • Oakdene
    • By Oakdene 17th Mar 17, 10:06 AM
    • 963 Posts
    • 1,590 Thanks
    Oakdene
    • #3
    • 17th Mar 17, 10:06 AM
    • #3
    • 17th Mar 17, 10:06 AM
    Is the gifted deposit in addition to a mortgage? If so her affordability may be affected by having to repay the loan...
    • eddddy
    • By eddddy 17th Mar 17, 10:10 AM
    • 4,486 Posts
    • 4,158 Thanks
    eddddy
    • #4
    • 17th Mar 17, 10:10 AM
    • #4
    • 17th Mar 17, 10:10 AM
    From an IHT perspective, if it's a gift and you survive 7 years it's not counted as part of your estate for IHT purposes.

    If it's a loan, however long you survive (and whether it's repaid before you die or not), it will be part of your estate for IHT purposes.

    So on that basis, it's more tax efficient to make it a gift.
    • diamond dave
    • By diamond dave 17th Mar 17, 6:17 PM
    • 550 Posts
    • 355 Thanks
    diamond dave
    • #5
    • 17th Mar 17, 6:17 PM
    • #5
    • 17th Mar 17, 6:17 PM
    Thanks for all replies. I thought that the loan/gift situation was as everyone stated - it means that I MUST live for another 7 years!! There won't be a mortgage so the only thing to arrange is how to prove to the solicitor that the money is legit. Presumably, just showing statements would be adequate.Any need for a legal document??
    • gettingtheresometime
    • By gettingtheresometime 17th Mar 17, 6:38 PM
    • 2,225 Posts
    • 4,805 Thanks
    gettingtheresometime
    • #6
    • 17th Mar 17, 6:38 PM
    • #6
    • 17th Mar 17, 6:38 PM
    But remember the 7 yr rule is for 0% exemption.....there's a sliding scale for years 1-6
    Lloyds OD / Natwest OD / PO CC cleared thanks to the 1 debt v 100 day challenge
    • AnotherJoe
    • By AnotherJoe 17th Mar 17, 10:32 PM
    • 6,295 Posts
    • 6,667 Thanks
    AnotherJoe
    • #7
    • 17th Mar 17, 10:32 PM
    • #7
    • 17th Mar 17, 10:32 PM
    Any other children?
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

844Posts Today

7,108Users online

Martin's Twitter
  • Beware the hidden £1,000s parents aren't told they must pay for University fees. My new FT column https://t.co/gDOyZDMCr9 (free to read) RT

  • Who do you think came out best in the Corbyn v May battle tonight?

  • Clever by Paxman; subtly testing out "strong & stable" by focusing on u-turns on Brexit view, social care, self employed tax & election date

  • Follow Martin