Hi Can You Help Me???

Ambdod

Me and my partner are buying our first home but need a 15% deposit (10k) , which my partners Grandad has very kindly offered to lend us (interest free).
How best should we proceed with paying the deposit can he write a cheque to the solicitor or will this be subject to tax nosey solicitors ( just a joke) .........
Or should he give us a cheque for us to pay into our account, then we can forward the money onto the solicitor or will this cause issues, tax or otherwise with the bank
Any help would be much appreciated.......

Thank you in advance

Chris:huh:

david29dpo

Accusing solicitors of being nosey is not a good start! Money laundering is the real reason. However, a cheque will be fine.

Ambdod

So do you mean a cheque through my bank account or directly???

g_attrill

One problem is that if it is a loan then the lender will need to know, because the repayments will affect your income. If it's a long-term loan to be paid back "as and when" then it might be different, they may view it that the lender has an interest in the property. The application forms should ask you the source and nature of the funds so read them carefully.

Ambdod

g_attrill wrote: »

One problem is that if it is a loan then the lender will need to know, because the repayments will affect your income. If it's a long-term loan to be paid back "as and when" then it might be different, they may view it that the lender has an interest in the property. The application forms should ask you the source and nature of the funds so read them carefully.

Thank you for your reply if the money was to be given as a gift do you know how this would affect me tax wise?

00ec25

if it is an outright gift then there is no tax to pay when you get it
IF your granddad dies within the next 7 years then the value of the gift will be included in his estate and his estate (not you) may (or may not) have to pay inheritance tax IF his estate is above the tax free (nil rate band) currently £325,000

if it is given as a loan then the first point has already been covered, ie you do not have a deposit, you have borrowed the deposit and your lender may have views on this. The second point is the loan also forms part of your granddad's estate and strictly speaking you could be asked by his executor to repay the loan if it is still outstanding when he dies - a less likely scenario.

poppysarah

If you split up in future how will you allocate the money from this deposit?

BexInLondon

When we did this my husband's dad had to write a statement saying that the money he was giving us was a gift, not a loan, and that he did not retain an interest in the property. It was a loan really, but it's not as though if we sold he'd be placing a charge on the property.