Parental Gift/mortgage

somethingcorporate

amyguildford wrote: »

Hollyhobby: I don't want to do anything fraudulent. My parents are signing the disclaimer saying its a gift, but I am choosing to repay them as I don't think it's fair on my siblings otherwise. Hopefully legally that isn't fraud?

Le loup: I see what you mean, thanks

If you are paying it back then it's not a gift and signing forms saying it is would be mortgage fraud.

zygurat789

somethingcorporate wrote: »

If you are paying it back then it's not a gift and signing forms saying it is would be mortgage fraud.

Surely to be a mortgage it has to be a legal charge registered on the property?
In this case the parents have signed a form saying it is a gift; if the recipient chooses to make gifts back to the parents there is no fraud.

amyguildford

somethingcorporate wrote: »

If you are paying it back then it's not a gift and signing forms saying it is would be mortgage fraud.

Except that I have no obligation to pay them back. If paying it back is going to result in shed loads of tax then I'll just take it as a gift. I think zygurat789 is right though. My parents have the mortgage responsibility on their property, not me on mine.

I believe the situation is now resolved as my parents have been in touch with their tax accountant and solicitor to sort out the details.

Thank you all for your help.

CLAPTON

amyguildford wrote: »

Except that I have no obligation to pay them back. If paying it back is going to result in shed loads of tax then I'll just take it as a gift. I think zygurat789 is right though. My parents have the mortgage responsibility on their property, not me on mine.

I believe the situation is now resolved as my parents have been in touch with their tax accountant and solicitor to sort out the details.

Thank you all for your help.

repaying a loan has no tax implications : paying interest does

holly_hobby

amyguildford wrote: »

Except that I have no obligation to pay them back. If paying it back is going to result in shed loads of tax then I'll just take it as a gift. I think zygurat789 is right though. My parents have the mortgage responsibility on their property, not me on mine.

I believe the situation is now resolved as my parents have been in touch with their tax accountant and solicitor to sort out the details.

Thank you all for your help.

The gift disclaimer will be reqd for YOUR mortgage (nothing to do with their's) - it will be reqd by your lender as if their capital donation (is not a certified gift) it essentially gives the Doner beneficial ownership rights over the property, which is why lenders are skittish with private loan arrangements and generally will not accept them if they are accurately declared. Whilst if its a non-conditional gift, then this provides the Donor with no BO rights, and why lenders are happy to accept (from immediate family only mind !).

If parents say its a gift, and THEY genuinely DO NOT want or demand or require any repayment of monies (contractual or otherwise), then they signing the disclaimer is NOT mge fraud.

You electing to make ad hoc payments to them, which you can make or not make as YOU elect, does not (in my opinion and I think would struggle under any judicial proceedings) constitute you making a fraudulent mortgage application re the source and details of YOUR deposit for your hse purchase.

Just be aware that your conveyencer will need to satisfy the source of deposit and Money Laundering regs, and parents may be asked for copy of account(s) where your gifted deposit came from.

Hope this helps

Holly

zygurat789

CLAPTON wrote: »

repaying a loan has no tax implications : paying interest does

The question is, what is interest?

kidmugsy

amyguildford wrote: »

My parents are signing the disclaimer saying its a gift, but I am choosing to repay them as I don't think it's fair on my siblings otherwise.

I suggest that a solution is to accept the gift, and treat it, and describe it, honestly as such. Separately consult your parents and siblings on how to square things up in future. Suggest, perhaps, that once your finances are in order after the house purchase you would like to start to gift money to your siblings. To cover for any risk of your early death you could even take out life insurance; less dramatically you could write a will such that the house goes to the siblings, or part to your parents, part to your siblings.

That sounds proper and honest to me.