gifting the purchase price to son

joannaber

Hi all,
I hope someone can advise.
I intend to gift my son who is a student the whole purchase price (ca. £. 120.000) to buy a flat to own and live in.
It will be his to keep.
Are there any legal /tax issues I need to consider?
Can it be done, please.
thank you

Linton

The only legal/tax issues could be if you die in the next 7 years the £120K (or most of it) would be included in your estate for IHT purposes or if you plan to give all your money to your son so that you can live off state benefits. Otherwise no problem, there is no gift tax in the UK and you can spend your money how you wish.

joannaber

Thank you Linton, Hopefully, I will live more than 7 years and I am still working so should not be needing benefits. Will anybody ask him where the money is coming from.as he will not need a mortgage? thanks

booksurr

since he will be buying in his name the conveyancing solicitor will ask him where the money came from, just the same as he is duty bound by his professional body to ask any buyer where their deposit money came from under money laundering rules

that means you may be asked to sign a letter saying it is an outright gift, but it should be no more intrusive than that

Linton

If he doesnt need a mortgage the people who may take an interest where the money came from is his bank because of money laundering checks. Presumably you could provide information if it was necessary. On the other hand if you were planning to give your son a carrier bag of £20 notes there could be a problem!

G_M

Linton wrote: »

...... On the other hand if you were planning to give your son a carrier bag of £20 notes there could be a problem!

Oh for the good old days when money was money not an electronic combination of '0's and '1's.

steampowered

Your son's solicitor will need to verify that the money is not derived from criminal activity. You will have to provide information on the source of funds to your son's solicitor, just as your son would if he was providing the money himself, but that shouldn't be difficult.

Cakeguts

I would like to suggest that you only gift the deposit. If you give someone an entire property especially at a young age you take away not only their self esteem in having something that they have worked for but you also take away their incentive to get a good job. Giving him a flat could in fact ruin his life. I would suggest that you give him enough for a deposit and then let him go through the process of getting a job to earn enough to make the mortgage repayments. You can always help later if he wants to move.

ognum

Cakeguts wrote: »

I would like to suggest that you only gift the deposit. If you give someone an entire property especially at a young age you take away not only their self esteem in having something that they have worked for but you also take away their incentive to get a good job. Giving him a flat could in fact ruin his life. I would suggest that you give him enough for a deposit and then let him go through the process of getting a job to earn enough to make the mortgage repayments. You can always help later if he wants to move.

I think this is an interesting observation and I would like to ask what evidence you have for this.

I am aware of five individuals (not me)who have been gifted properties, none of them have ruined lives. In fact for all of them it has enabled the, to become well rounded working individuals who contribute to society.

The independence they have been given at a young age has enabled them to contribute to society, they are all professionals, have families now and live stable lives.

Who do you know who has had their life blighted?

Cakeguts

There is evidence of someone that I don't want to go into on here but my comment was based on evidence. If this goes wrong it has the possibility of going very wrong.

ReadingTim

Cakeguts wrote: »

There is evidence of someone that I don't want to go into on here but my comment was based on evidence. If this goes wrong it has the possibility of going very wrong.

Wonderful! The old "I'm not going to provide any evidence to back up my far-fetched claim, but what I say is the truth".... chestnut. Pull the other one mate, this one's got bells on it.

The OP's son is a student. If you feel his moral, spiritual and intellectual character needs to be improved by large debt repayments, then his student loan will fit that bill nicely. In the meantime, he needs somewhere to live, and one of his parents has offered to buy him a flat. It's hardly the end of civilization as we know it.