Buyng a second home.

Cacran

We are financially able to buy a second home.
Our daughter is having a baby and will be needing a home.
If we bought a house and let her live there, where she would be paying all the bills etc. would that cost us anyhting tax wise? I know that if we sold the home it we would be liable for capital gain.
Our son lives at home at present and obviously at some point there would have to be some sorting out done to make it fair. We are hoping that once my daughter has got back to work and aybe when the child starts school, she would be better off financially and able to sort herself out.
We would have the problem of not getting any interest on our investment which would have an effect on our present income, so I would have to give that a bit of thought.
What does anyone think about this idea?

RAS

How will your daughter fund her living costs?

poppysarah

When you say "able to buy a second home" do you mean cash or mortgage?

mlz1413

I think if your daughter lives in a house owned by you she will not be able to claim housing benefit so if this is an issue you probably need to speak to CAB about the whole situation.

Tax wise if are not receiving any payments from your DD then you don't have any extra income to declare.

If you are paying a mortgage but not as part of a rental business then you will not be intitled to any tax reliefs on the payments.

You are correct that CGT will be payable if sold at a gain over the annual limit later on as this will be a second home - there are lots of rules to tax and its well worth consulting a tax accountant before selling (maybe before purchasing too)

RAS

mlz1413 wrote: »

I think if your daughter lives in a house owned by you she will not be able to claim housing benefit so if this is an issue you probably need to speak to CAB about the whole situation.

She can claim LHA but her parents have to charge her the full market rent or it will be considered a contrived tenancy.

poppysarah

RAS wrote: »

She can claim LHA but her parents have to charge her the full market rent or it will be considered a contrived tenancy.

And they must be prepared to evict her if the rent isn't paid.

angel.cake_2

Cacran wrote: »

We are hoping that once my daughter has got back to work and aybe when the child starts school, she would be better off financially and able to sort herself out.

Wishful thinking!

Cacran

We could buy the house outright. My daughter will pay her way from her income from her job, which she returns to in January. Hopefully, the father who abandoned her a few months into the prgnancy, will pay some money towards the child.

poppysarah

A tiny tiny note of caution ... some women just don't want to return to work once they've had their baby. There's nothing wrong with it and it's often a great decision for them and their child... but don't rely on her having an income ... think about all the possibilities...

And hope is a wonderful thing - but sometimes men don't pay up when they should..

Nosht

Cacran wrote: »

We could buy the house outright. My daughter will pay her way from her income from her job, which she returns to in January. Hopefully, the father who abandoned her a few months into the prgnancy, will pay some money towards the child.

Don't rely on the Child Support Agency being able to chase this up as a friend of mine's daughter has a 12 year old whose father has never paid a penny towards his upbringing despite having employment in his mother's nursery business & a car, which is in his mothers's name. :eek:

Regards,

N.

mlz1413

Cacran wrote: »

We could buy the house outright. My daughter will pay her way from her income from her job, which she returns to in January. Hopefully, the father who abandoned her a few months into the prgnancy, will pay some money towards the child.

With the current economic climate also think of worse case sernio's:
redunancy / company closing down / part time hours / house falling in value / house needing new boiler ... etc

The father may or may not pay towards his child but for the first year do not count on that money. After that you can re-assess the situation.