Tax treatment of Offset Mortgage

olbas_oil

Some offset mortgages (like Chelsea) allow a number of savings accounts to be offset against the amount owing on the mortgage, and the savings in these can be owned by others - such as parents, uncles etc.


In effect I suppose the saver is forgoing a certain amount of interest on savings to benefit the child who has to pay less interest.


But what does the taxman think? Is this a deemed income for the saver, liable for tax? Is it a deemed gift (potentially exempt transfer?) to the child of the foregone interest?

kingstreet

As the interest is given up, there are no tax implications.

dimbo61

YBS also have friends and family where parents and others can offset there savings against your mortgage.
You save interest but parents/friends do not get any interest on the money in the offset accounts