Paying Off In-Laws Mortgage

paulrh67

My in-laws have an endowment mortgage with a policy that will be in shortfall at the end of the mortgage term. I have some savings that I could use to pay the mortgage off. I do want to get the investment back (plus a little interest) when it comes to selling the property, either if they move to a cheaper property or when they both pass away.

What are the implications of this arrangement (immediate tax libility, possible capital gains and inheritance taxes)? How would I go about setting up such an agreement?

Thanks for any help.

Thrugelmir

Speak to a solicitor to get a properly worded agreement drawn up. That's covers how you enviage the arrangement working. There are many scenarios that you haven't even thought of I suspect.

paulrh67

Thanks. Yes, this is definitely something that requires legal documentation.

Approx what is a solicitor likely to charge for this service?

amnblog

Presumably you won't be picking up the bill for the solicitor as well?

McKneff

Why go to the expense of a solicitor. Its just a straightforward loan in effect.
Just a written agreement, dated snd dated would be sufficient, surely

paulrh67

Yes I will but that will be factored in to the eventual payback.

getmore4less

Loan is the easy one(optional charge on the property).

Needs to have payment terms so it can be enforced as a debt.
if you want interest then that is taxed.

if you want to have no payment you need the terms of when it is due in full(house sale, death etc.)

if you die as it will be a debt against your estate which may not be able to be called in for some time leaving an open ended administration.