Sourcing deposit - dodgy?

Thrugelmir

Above £5k. The interest free loan will be treated as a benefit to you, and will be reported on a P11d to the tax authorities.

cosmicbeard

True. But it would still be better than paying that 20k in rent...I think.

holly_hobby

Cornucopia wrote: »

The employer could simply buy the deposit proportion of the property with you, and you could pay rent on the proportion he owns. You could buy it back from him over a period of time.

No, the lender will not permit any other individual/company, whom are not party to the mge, to have any beneficial ownership by way of a gift.

Of course there are many instances where we see staff loans, such as those to pch season tickets and staff mges (as seen with employees of banks and ins cos - which as raised are taxable as a BIK).

Your employer can only write a bad debt off the books - so if he did this, when you had not defaulted on the agreement, its essentially tax fraud - and that has very serious ramifications with HMRC (not to mention a very poor impression of the employer in attempting to use you in this manner).

However in relation to mges, gifted deposists are accepted from direct family members (extended in exceptional circs), plus to boot in this case is the fact that the deposit, is actually a staff loan, and is made with reservation loan i.e it is donated with the requirement of repayment, which will affect affordability (if regular repayments are reqd), and raises the issue re beneficial ownership (which the donor may attempt to secure in the event of the mortgagor defaulting on the mge arrangement, or in this instance leaving their job). So on several levels, this is a non-starter. (notwithstanding the thoughts currently given re lying about the source of capital, and attempting to hide its origins by channelling it via Mum and Dads bank account - this would be foolish and fraudulent.

Sorry, I know that none of the above will make you happy, and I'm not about to give ideas on how to manipulate the system - regulations are there for a reason.

So, start saving .... consider that whilst you rent, you don't have any finanical responsibiity for the maintenance and up keep of the property, including the likes of footing the bill for issues with central heating (which can be costly), tiles off roof, etc .. etc... you get the idea.

Hope this helps

Holly

antrobus

Thrugelmir wrote: »

Lending money to unconnected 3rd parties then writing the debt off. Is in essence tax avoidance....

I'm inclined to disagree; it's tax evasion.

Crumbs, if you could take a salary sacrifice to fund a loan to a connected party etc they'd all be bl00dy at it!

somethingcorporate

They could pay you a massive bonus this year (that would be subject to tax/ni/student loan) and you could have a significant paycut over the next 3 years to pay for it - this may work.

It is still no substitute for the ability to save for a deposit - if you cannot save for a deposit it is unlikely you are going to have the finances to maintain a house yourself, pay back a mortgage and a massive loan.

cosmicbeard

I have considered that. The bonus would be subject of deductions of approx £9k, leaving me with £11k deposit. With salary reduction I could still get my mortgage.

Paying back with the reduction in salary; I would have approx £9k less deductions over 4 years. Numbers are very rough, from memory.

This combined with a years savings may be my route. *finds calculator*

Many thanks to everyone for sharing your thoughts.

cosmicbeard

Forgot to say I am able to save for the deposit...just impatient. I am confident I can cover loan/salary reduction and still afford mortgage.