Buying parents house form them ?

jennifernil

M635 wrote: »

lincroft, we don't need a physical cash deposit, eg house true market value £125k, we purchase for £125k, mortgage for £100k, balance 25k is deposit on paper but not physically needed for solicitor/Mort.Co. to proceed, so home purchased for 125k, mortgaged for 100k


We may not occupy it, but we are paying for our parents to live in it (they will also have some of the equity to spend on thier lifestyle) we're sort of helping each other, them giving us the deposit, but in turn we are funding a better retirement for them so they now have an expendable income/savings from the sale to enjoy while they are still young enough to do so and enjoy what they spent 30 odd years paying for.

If you are mortgaging for £100k, and they give you back the £100k between you as gifts, where do they get the extra money to spend from?

M635

problem resolved

Annisele

Fictional figures or not, I can't see that your plan would achieve what you want.

There are three of you, so your parents want to release 3 times £x from the property (plus a bit), and then give each of you a gift of £x.

That will mean that you are each liable for a mortgage of £3x plus a bit - which is going to seriously reduce the amount you're able to borrow on a mortgage of your own. (I say you'll each be liable for £3x rather than £x because your lender won't care that you've come to an arrangement that each sibling will pay a third - the lender will see that any one of you could potentially have to pay for all of it, and treat you accordingly).

You might find that the mortgage you have on your parents' property reduces your own borrowing power to £0, which would make the whole thing completely pointless.

SuzieSue

If one of the brothers gets divorced then their share of the house might be taken in to account in the divorce settlement so you may be forced to sell it.

Also, if one of the brothers is declared bankrupt then your parents could lose their house.

M635

problem resolved

SuzieSue

M635 wrote: »

Annisele, sorry, didn't realise my question was asking for opinions on something i haven't posted full details on, so you could answer based on presumptions, sorry can't remember asking for mortgage advice...................

problem with forums, answering everything apart from that is asked.

shame there isn't an option to close a thread.

You don't have to keep reading the answers as they are obviously not what you want to hear, but they might help someone else considering doing a similar thing.

You obviously know everthing and don't need advice, so why are you still reading?

Justicia

M635 wrote: »

shame there isn't an option to close a thread.

[EMAIL="forumteam@moneysavingexpert.com"]forumteam@moneysavingexpert.com[/EMAIL]

M635

Preoblem resolved

SuzieSue

M635 wrote: »

so why are you posting on a thread started by me about a specific question, and not answering it.

i should mark as spam really.

I can say what I want as long as I don't break the forum rules.

By all means waste the moderators' time and mark my post as spam.

Annisele

M635 wrote: »

Annisele, sorry, didn't realise my question was asking for opinions on something i haven't posted full details on, so you could answer based on presumptions, sorry can't remember asking for mortgage advice...................

problem with forums, answering everything apart from that is asked.

shame there isn't an option to close a thread.

Nice.

If you post on here then you get the opinions you're given. If they don't help you, they might help somebody else in a similar position. And if you don't like something a particular poster says, there's an ignore button.

If you want advice specific to your circumstances, from somebody with professional indemnity insurance when things go wrong, go and pay for it.

Your original question was whether you or your parents were liable for tax. All I can say on what you've posted is that you're potentially looking at both CGT and IHT, and possibly also income tax (since in your other thread you mention the possibility of your parents paying you a rent).