Giving money to parents to buy a house!!

socrates

winglessbird wrote: »

Need advice,

My husband's parents have the opportuntiy to buy there home "from the council" at a discounted rate. Now to do so we are adding more money onto our mortgage and giving them our savings. This all comes to around £40,000. The house will be willed to us. Their fear is that because they are both pensioners questions will be asked as to where they got the money or will we have to pay tax on the money as it is essentially a gift?

Any help would be appreciated.

Give them the money to purchase the property.

Then visit a solicitor and get them to produce a 'Deed of Trust' - this document will say that immediately after the qualifying period that the LA allows before the property is sold or transferred the property will transfer into your names.

The document will have to be signed by them and checked by a different solicitor, to confirm that they have understood the contents of the agreement in its entirety. You are responsible for this cost - more morally than legally.

One thing you do not tell us is - are you lending them the money?

If so that will also have to be written into the agreement on whatever terms you have agreed.

Once the 3 or 5 years have passed that the LA allows before the property is sold or transferred you visit a solicitor who registers the change of ownership with the Land Registry - and as there is a 'DOT' in place your in-laws will not need to be involved or sign anything.

It can get quite messy IF there are other siblings and IF all the positives and negatives are NOT discussed before all this happens.

I do not think the will route is the best way forward for many reasons - discussed by other people in their answers.

However have performed a similar transaction with a friend and we are still friends 15 years later.

winglessbird

Thank you very much for yor reply, it has been very helpful.

Winglessbird