Share Buy with Daughter

GrandTad

I am about to receive an inheritance so will be coming into some money - just at a time when interest rates are pretty poor. I could blow the lot on a brand new Aston Martin but, in reality, think I should do something more constructive. My daughter and her partner would like to get on the property ladder, but can't afford it just yet. They are currently renting a property but I that rent would be better spent on a mortgage. I think property would be a better investment for my funds at this time.

So, the plan forming in my head is to buy a house in joint ownership with my daughter - they fund half the purchase (or what they can afford) with a mortgage, I fund the other half with my money. Hopefully, as the market picks up, and they add value to the property, we will both eventually get a return on our investments and they will have a foot hold on the property ladder.

What are the pitfalls in such a scheme? What taxes will I be hit with by owning half a house that I do not live in (they will be living it)? Is there a better way of helping out my family?

Pee

Potentially you will have a liability to CGT on any gain in value in the property, as you don't live there. There is no CGT payable if you die whilst owning the house. You should have a Declaration of Trust drawn up so that you can agree beforehand what will happen if your daughters relationship breaks down.

Another option would be to lend the money by private mortgage as a second charge, but it would make your investment very vulnerable.

chewmylegoff

GrandTad wrote: »

I am about to receive an inheritance so will be coming into some money - just at a time when interest rates are pretty poor. I could blow the lot on a brand new Aston Martin but, in reality, think I should do something more constructive. My daughter and her partner would like to get on the property ladder, but can't afford it just yet. They are currently renting a property but I that rent would be better spent on a mortgage. I think property would be a better investment for my funds at this time.

So, the plan forming in my head is to buy a house in joint ownership with my daughter - they fund half the purchase (or what they can afford) with a mortgage, I fund the other half with my money. Hopefully, as the market picks up, and they add value to the property, we will both eventually get a return on our investments and they will have a foot hold on the property ladder.

What are the pitfalls in such a scheme? What taxes will I be hit with by owning half a house that I do not live in (they will be living it)? Is there a better way of helping out my family?

get the aston, it will depreciate slower.