We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Buying a house monthly off a family member...
ronaldadio
Posts: 80 Forumite
Not sure how to explain this, but I'll try.
A family member is prepared to sell us their house at a knock down price - House value around £110,000 and selling to us for £84,000. Basically, they have lots of cash and have bought another house (they own 4 houses)
Anyway, I want them to in effect 'gift' us the house.
We will then pay them back the £84,000 in the form of a loan, made up of around £30,000 we will get from inheritance when we sell another house and £500 a month until it is cleared.
I want it to be 2 completely separate transactions -
1) the house signed over to us
2) We have borrowed £84,000 off them that we will pay back.
I don't want them to be part of the same agreement.
Is this possible?
Thank you
A family member is prepared to sell us their house at a knock down price - House value around £110,000 and selling to us for £84,000. Basically, they have lots of cash and have bought another house (they own 4 houses)
Anyway, I want them to in effect 'gift' us the house.
We will then pay them back the £84,000 in the form of a loan, made up of around £30,000 we will get from inheritance when we sell another house and £500 a month until it is cleared.
I want it to be 2 completely separate transactions -
1) the house signed over to us
2) We have borrowed £84,000 off them that we will pay back.
I don't want them to be part of the same agreement.
Is this possible?
Thank you
0
Comments
-
ronaldadio wrote: »Not sure how to explain this, but I'll try.
A family member is prepared to sell us their house at a knock down price - House value around £110,000 and selling to us for £84,000. Basically, they have lots of cash and have bought another house (they own 4 houses)
Anyway, I want them to in effect 'gift' us the house.
We will then pay them back the £84,000 in the form of a loan, made up of around £30,000 we will get from inheritance when we sell another house and £500 a month until it is cleared.
I want it to be 2 completely separate transactions -
1) the house signed over to us
2) We have borrowed £84,000 off them that we will pay back.
I don't want them to be part of the same agreement.
Is this possible?
Thank you
Have you thought about the tax implications of this, both the CGT and, potential IHT elements?0 -
Sounds like a lot of dosh purely for a loan.
Why not take a mortgage? £30,000 deposit from your inheritance, and £54,000 mortgage?
The rates will be lower. Won't they?Proud to have lost over 3 stone (45 pounds,) in the past year! :j Now a size 14!
You're not singing anymore........ You're not singing any-more!
0 -
Yes possible, but why?ronaldadio wrote: »....
I want it to be 2 completely separate transactions -
1) the house signed over to us
TR1, AP1, ID1 sent to Land Registry.
House registered in your name. Done
As it's a gift, Inheritance Tax under the 7 year rule will apply if they die.
If this property was not their main residence, they will have Capital Gains Tax to pay.
2) We have borrowed £84,000 off them that we will pay back.
I don't want them to be part of the same agreement.
Is this possible?
Thank you
By linking them, the gift (for Inheritance Tax purposes) would be £26K (110 - 84).
You can either both 'wing it' ie they trust you to pay the £30K when you sell, and to then pay £500 pm for the next 108 months (9 years). Assuming they don't want interest as well.
Or you could draw up a loan agreement, perhaps specifying what happens if payments are missed. Or stop.
Or they could put a Charge on the property (like a bank does when it lends money for a house purchase.0 -
CGT implications for the relative?
http://www.gillespieandanderson.co.uk/cms/filelibrary/Key_features_of_capital_gains_tax.pdf0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.4K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.5K Work, Benefits & Business
- 601.3K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards