cgt helping daughter on property ladder

jhe

hi. looking for advice please, a financial advisor has advised would not be liable for cgt if enter into a joint mortgage. daughter can meet mortgage repayments easily, but does not have a credit history[never been in debt] making it difficult to obtain a mortgage in her own right but no problem if i am added to mortgage.has always paid in full for car insurance etc so has never applied for credit of any type.have been advised to get a joint mortgage then remortgage in a couple of years in her own name.dont have problem with this but as i own my own property, will this make me liable to cgt . she has seen a property that i agree with her is ideal and she has a good deposit but i am concerned about cgt.

Rolo_Tomasi

Are you just securing the mortgage or would the property also be in joint names?

jhe

joint name, we suggested me being guarantor but it is more straight forward for me to be on joint mortgage regarding obtaining the motgage thanks

CLAPTON

has she actually tried to get a mortgage from a high street mortgage company?

jhe

yes but not succesful because of no credit history

CLAPTON

who did she try

and why do you say its because she has no credit history rather than income or deposit...
and has she now got a credit card to start bulding her credit history?


and you will be potentially liable to CGT if you are part owner when the property is sold.. why did your mortgage advisor say otherwise?

jhe

thanks clapton.thats what i was concerned about.the financial advisor is fsa registered and i was wary about the advice he gave. she has never had a credit card and to be honest doesnt want one, but may have to get one ive explained this to her.she has around 30% deposit a combination of what we have saved in her name for her since birth and she has saved every penny she could since starting work. as she is only 20 maybe her age is against her and lack of credit history.its just she has set her heart on a house which is a good buy. i would like to help her if i possibly can but not store up probs with cgt.

CLAPTON

re-read my post

jhe

CLAPTON wrote: »

who did she try

and why do you say its because she has no credit history rather than income or deposit...
and has she now got a credit card to start bulding her credit history?


and you will be potentially liable to CGT if you are part owner when the property is sold.. why did your mortgage advisor say otherwise?

the fa said it was prob refused because of her lack of credit history and her age, but she did not recieve a definite reason
no credit card.
and thanks for the advice on cgt, think i need to take further advice. what the fa said is if she remortgages after 2 year i would not be liable for cgt. she was asking for just over 4x her income.

the house would be transferred into her name only at the time she remortgaged

TM1976

From what I have read I can't see why you would have a CGT liability. As far as I understand you are acting as a guarantor for your daughter's mortgage. So if she defaults you may be liable for repayment but you are not putting in any cash (that you retain a stake in).

If you are putting a stake in your potential liability may depend on the figures you intend to put in.

Simstwins

I had a similar issue when I bought my house, the solicitor for an additional charge created a 'property trust', whereby I was the beneficiary but both my father and myself were trustees. This was completed in 1990, so don't know if the rules have changes. The financial advisor wouldn't know about these