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using mortgage account as holding account to be mortage free for a while
galsy
Posts: 1 Newbie
I have my mortgage through the One Account. This account works like a current account where all your income and bills go in and out but your mortgage is also included so you are in overdraft to the cost of your mortgage. Each month, you pay your mortgage as usual and the overdraft heads toward zero. When you are mortgage free, your account then turns to a normal current account and you are mortgage free.
My parents have savings in their account that they won't need for a while. They barely gain interest but don't want it locked in anything long term. They have offered to give me some of their savings on loan to get my account up to zero. It would make me mortgage free for a while and my parents would treat it like a holding account.
When they want the money back, I will then transfer it back to them and go back into overdraft and start paying my mortgage again.
The money is only on loan and not a gift. I am assuming I pay no tax for having the money in my account but what are the tax implications for my parents? Their savings totals do exceed the IHT threshold but would they be able to loan me the money without any costs & receive it back with no cost & only have 40% tax implications if either of them died within 7 years of loaning me the money i.e.loaned money included in their total estate and make me liable to tax.
I have read all the technical gumph and different scenarios but I would love a simple answer to suit my type of mortgage account and situation which confirms if I can take this money and pay it back in a few years without any penalties for either parties
My parents have savings in their account that they won't need for a while. They barely gain interest but don't want it locked in anything long term. They have offered to give me some of their savings on loan to get my account up to zero. It would make me mortgage free for a while and my parents would treat it like a holding account.
When they want the money back, I will then transfer it back to them and go back into overdraft and start paying my mortgage again.
The money is only on loan and not a gift. I am assuming I pay no tax for having the money in my account but what are the tax implications for my parents? Their savings totals do exceed the IHT threshold but would they be able to loan me the money without any costs & receive it back with no cost & only have 40% tax implications if either of them died within 7 years of loaning me the money i.e.loaned money included in their total estate and make me liable to tax.
I have read all the technical gumph and different scenarios but I would love a simple answer to suit my type of mortgage account and situation which confirms if I can take this money and pay it back in a few years without any penalties for either parties
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