Paying my sons mortgage then what

Savvy_Sue

Martin has an article on IFAs, that would be worth a read. Sorry I should have linked to it earlier ...

jennifernil

Not an identical situation, but I have helped our daughter with her mortgage.

In her case she was looking for a BTL mortgage on a flat she owned outright and wanted to rent out. The money thus released formed her deposit on a new house.

We have negotiated a rate that is less than a commercial one, but more than my money was earning in the bank. We had a solicitor draw up a simple agreement and register a charge on the property, the cost was £180. I have done this as we also have a son to consider so it could not be an outright gift.

She is making regular monthly repayments. I declare the interest to HMRC, but it is within my personal allowance, so no tax to pay.

If you do not want to make it an outright gift (which is perfectly OK to do) , you could take your son's mortgage and make it interest free if you wished. That way there would be no interest paid to you so no tax to pay. He would make repayments of capital only.

We used an ordinary local solicitor.

ognum

Issues to think about

If you own the house

Your estate will pay Inheritence Tax on hs home.
It will be taken into account if you need future care
You will become his landlord and need to fulfil LL duties
You will pay tax on the rent he pays you.

If you pay off his mortgage

Once given the money is his, he could sell and travel the world
If he marries again and then divorces the house will be considered in the divorce.
If you require care it may be considered a deprecation of assetts.
If your son loses his job his benifits will be affected by his house ownership


Just a few things off the top of my head!