Gifting money already in my house.

JamesSmith4

I have sold my house and some of the money was originally put in by my parents when I purchased it. They are now gifting this money to me and no longer have an interest in it. This money will be put down for my next property sale.
Are there any forms they need to fill out or will it just be an adjustment to their estate in their will? The sale of my house and purchase of the new onesie with the solicitors as we speak.
I understand the 7 year potential tax implications and we are happy with the consequences.
Thanks in advance

Keep_pedalling

There are no forms to fill out but to make their executors job a bit easier they should keep a record of the gift until the 7 years is up.

How long ago did they originally give you this money? Presumably they gave you this as a loan but have just converted it into a gift. Unless you have been paying some of it back, I would say that it could be counted as a gift from the date it was originally given to you.

JamesSmith4

Thanks.
It was 6 years ago. They had a second charge on the property which is being taken off this week. This will leave the money ready with the solicitor to move onto the next property.

JamesSmith4

It wasn't a loan, just am investment which is now being gifted.

getmore4less

JamesSmith4 wrote: »

Thanks.
It was 6 years ago. They had a second charge on the property which is being taken off this week. This will leave the money ready with the solicitor to move onto the next property.

What was it if it was not a gift or a loan?

The charge would indicate a loan.
Was this for a fixed amount the same as they put in or part of the property?

for gift purposes that would be the day they gift it to you.

If you are borrowing...

you will need to inform the lender of the gift.
did you inform the previous lender of the loan?

Keep_pedalling

Definitely was not a gift 6 years ago, so the 7 year clock starts from the date that they waived the debt. If they have not already used their gift allowance for this and the last financial year then £12,000 of this gift can be tax exempt immediately.

silvercar

Keep_pedalling wrote: »

Definitely was not a gift 6 years ago, so the 7 year clock starts from the date that they waived the debt. If they have not already used their gift allowance for this and the last financial year then £12,000 of this gift can be tax exempt immediately.

I agree with this.

you will need to inform the lender of the gift.
did you inform the previous lender of the loan?

I don't think this is necessary as there definitely won't be a repayment requirement. Think if a second charge was on the property from a loan company and it was cleared by the sale and one wasn't taken out on the new property. The new lender doesn't require statements of how the second charge was cleared.

xylophone

The sale of my house and purchase of the new onesie with the solicitors as we speak.

An expensive garment! Designer brand?:rotfl:

getmore4less

silvercar wrote: »

I don't think this is necessary as there definitely won't be a repayment requirement. Think if a second charge was on the property from a loan company and it was cleared by the sale and one wasn't taken out on the new property. The new lender doesn't require statements of how the second charge was cleared.

This money will be put down for my next property sale


Gifted deposit.

silvercar

getmore4less wrote: »

This money will be put down for my next property sale


Gifted deposit.

So if someone offered to clear a secured loan you had on a property, would that then count as a gifted deposit?

It is releasing a charge, not paying over any money.

If it is a grey area, would the removal of the charge now (rather than on sale) make it clearer. Then the buyer's money would all be going towards the forward purchase less the mortgage clearance money.

getmore4less

If it was that easy people could just create debts by getting £20k off their parents as a loan and then the parents just right off the loan, no gift.

Just because it is hidden in the step of the purchase/sale of an asset does not make the fact it is a gift(at the time the charge is removed) disapear, just easier to hide from the lender.