Buying a house for a family member and repayment of the loan

Beckyy

What is the house value, amount of deposit needed and their incomes?

victor2011

Thank you all for your time.

At the beginning of the next week we will be meeting a solicitor and a fiscal advisor and we will share their response with you.

zzzLazyDaisy

victor2011 wrote: »

we will be meeting a solicitor and a fiscal advisor.

That is an unusual term - can you just confirm that the property you intend to buy is in England?

The comments that have been made here generally apply to England, but at least some of the answers may be different if you live in Scotland, for example.

victor2011

Hi All,


Sorry for the delay in updating the forum, but now we have concluded the purchase. After the meeting with our solicitor and an accountant we have decided to (we have been advised to) buy the house with a tenancy in common agreement - as zzzLazyDaisy suggested – with a Declaration of Trust specifying all the individual 4 different shares (mum, dad, daughter and boyfriend) and some other extras (like not selling the share to “third parties” without offering it first to any other person in the contract).
Pro:
1) 1) From the tax point of view, with a tenancy in common we keep our 4 personal tax allowances and in case of any future changes in the shares % we are more protected against any capital gain tax.
2) 2) In this way anyone’s share/investment is protected but we still have some flexibility in case we decide to change the share % (i.e: we don’t need to have different solicitors).
3) 3) The couple will have the chance to save some money that they can use to buy extra shares in the house or use it for the deposit if they decide to buy a different house.
Cons:


1) 1) We (parents) will not be living in the house so we will be losing the “rent” amount. However the rent “lost” is always lower than the amount they would be paying to the bank.


Thank you all for you thoughts!