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    • diamond dave
    • By diamond dave 17th Mar 17, 9:03 AM
    • 534Posts
    • 347Thanks
    diamond dave
    Lending house deposit
    • #1
    • 17th Mar 17, 9:03 AM
    Lending house deposit 17th Mar 17 at 9:03 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, 9:06 AM
    • 439 Posts
    • 587 Thanks
    sparky130a
    • #2
    • 17th Mar 17, 9:06 AM
    • #2
    • 17th Mar 17, 9:06 AM
    Most lenders would require it to be a gift.
    • Oakdene
    • By Oakdene 17th Mar 17, 9:06 AM
    • 770 Posts
    • 1,038 Thanks
    Oakdene
    • #3
    • 17th Mar 17, 9:06 AM
    • #3
    • 17th Mar 17, 9:06 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, 9:10 AM
    • 4,286 Posts
    • 3,949 Thanks
    eddddy
    • #4
    • 17th Mar 17, 9:10 AM
    • #4
    • 17th Mar 17, 9:10 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, 5:17 PM
    • 534 Posts
    • 347 Thanks
    diamond dave
    • #5
    • 17th Mar 17, 5:17 PM
    • #5
    • 17th Mar 17, 5:17 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, 5:38 PM
    • 1,991 Posts
    • 4,303 Thanks
    gettingtheresometime
    • #6
    • 17th Mar 17, 5:38 PM
    • #6
    • 17th Mar 17, 5:38 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, 9:32 PM
    • 5,697 Posts
    • 5,940 Thanks
    AnotherJoe
    • #7
    • 17th Mar 17, 9:32 PM
    • #7
    • 17th Mar 17, 9:32 PM
    Any other children?
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