Gifting money already in my house.

silvercar

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.

So if parents gift a deposit for the first home, what happens when the offspring move? Is that gift returned and re-gifted for the second home or has it become the offsprings? I would argue that it is a gift the first time it is made and after that belongs to the offspring. After all a gift is a gift and not a loan.

In this case it was a loan that became a gift and now belongs to the offspring.

getmore4less

silvercar wrote: »

So if parents gift a deposit for the first home, what happens when the offspring move? Is that gift returned and re-gifted for the second home or has it become the offsprings? I would argue that it is a gift the first time it is made and after that belongs to the offspring. After all a gift is a gift and not a loan.

In this case it was a loan that became a gift and now belongs to the offspring.

That would have been a loan the gifts happen once.

AIUI it is the timing of the gift that lender are interested in, there comes a point where they no longer care the source of the deposit money.


In this case the gift is clearly at the time the loan is written off and is being used to fund a deposit on a property. (which you seem to be agreeing)

The lender may not care(or even find out/get told) as it is hidden in a property transaction and the conversion of a debt

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Also the question of it it was a fixed amount or a share of the value, implied by the fact it was an investment, has not been answered.

If a share there will be a CGT assement required on the disposal.

silvercar

In this case the gift is clearly at the time the loan is written off and is being used to fund a deposit on a property. (which you seem to be agreeing)

I do agree, broadly. Just thinking that if the loan is converted to a gift now, rather than when the property is sold. The deposit is all in the property transaction and none would have to be declared as a gift.

We bought our first property with 10% deposit. Within a few weeks our mortgage was reduced by a sizable gift equal to our deposit size. Had the gift been made prior to purchase our deposit would have been made up largely of a gift. This was all back in the day when lenders were only concerned with the size of the deposit and not bothered whether it was gifted or savings, but then it would have been the difference between a 20% deposit (1/2 gifted) or a 10% deposit. In reality it makes no difference, but you do wonder at lenders' views today.

getmore4less

silvercar wrote: »

I do agree, broadly. Just thinking that if the loan is converted to a gift now, rather than when the property is sold. The deposit is all in the property transaction and none would have to be declared as a gift.

Depends how the question is asked.

Same thing(similar to your senario) if the gift is used to reduce a debt(mortgage) on an asset(house) that will be sold to provide the deposit.

The question I guess is "when does a gift become savings?"