buying 50 % of sons house

kdam

Hi can anyone tell me the pitfalls of such a venture

My son owns a house valued at 50k its mortgaged and rented out my questions are

Could I buy 50% or would the 25K be seen as a gift and be liable to tax

Or if he sold it to me outright for 25k would I have to pay tax if I sold it after say 5 years ( not living in it but keeping it rented out )

Or if I paid off his mortgage and he left the house to his daughters could I be the trustee until they were 18 years of age so that his ex could have no claim on the property.

any help appreciated

Cheeky_Monkey

What do you hope to achieve by doing this, other than deprive his Ex of her (potentially) rightful share if it were sold?

kdam

it would be an income for us to boost our pension as 25k isn't getting hardly any intrest in the bank we would have a half share of the rent, son would be mortgage free using the 25k to clear his mortgage so making him better off, as for the ex its not trying to deprive her more like stop her getting her hands on the childrens inheritance and blowing it all.

Pixie5740

How much of a mortgage is outstanding? You can jointly own the property with your son where you are both on the deeds but I think you'll both also have to be on the mortgage if a mortgage is still required after you put in £25k.

I'm not sure if you mean ex-wife, ex-girlfriend, ex-boyfriend, regardless, if the ex is legally entitled to a share of the property then selling half the property to you won't circumvent that.

xylophone

he left the house to his daughters [/QUOTE

I assume you mean put the house in trust for his minor children rather than leaving it to them?

The idea would be that you would make him a gift of sufficient money to pay off his mortgage and he would then gift the property to the children?

Minors cannot hold property in their own names so that a trust would need to be created.

There are tax considerations when a parent settles property on his child.

http://www.hmrc.gov.uk/trusts/types/minors.htm

This would need the advice of a solicitor specialising in trusts.

The house is not your son's principal private residence - if he sold the house or part of it to you there could be CGT implications.

If a divorce is in train, the ex wife's solicitors would be looking very hard at any property transactions.

Your son should take legal advice.