Whats the best way to help family members? buy house or just give them some money?

PokerPlayer111

Just some future plan if i ever make it, right now cant do this but in theory... Whats the best way to help, if you buy someone a house to live in i feel you can "give" them more because you can keep it in your name as an asset/investment (good idea?)

If just giving family members money you get less tax to pay right? but then you likely cant give such a sizeable gift.

If a family member were to help you out in life what would you prefer? a house bought for you to live in rent free for pretty much your whole life but not in your name or would you prefer just the cash but probably at half the value of house, or maybe even less like 33% or maybe even 20%.

Sometimes if you help people, in some ways they dont like it right? i have all the usual problems in my family, big egos, nobody really gets along truly. Is helping at all even a good idea, or maybe its best to just be there for people?

G_M

If your family member lives in a house you buy and own:

* you'll be a landlord with many legal responsibilities (see below)
* you'll be liable for Capital Gains Tax if/when you sell

Cash gives the family member more choice/freedom. They can move when they want, live where they want, do what they want with it - they might prefer to rent for ease of mobility and spend the money on education for the kids/whatever.

You say th prperty would be worth considerably more than the cash would be: why? Because you'd get a mortgage on the property? That would need to be a BTL mortgage and few lenders allow family to be your tenants.

* New landlords: advice, information & links

PokerPlayer111

G_M wrote: »

If your family member lives in a house you buy and own:

* you'll be a landlord with many legal responsibilities (see below)
* you'll be liable for Capital Gains Tax if/when you sell

Cash gives the family member more choice/freedom. They can move when they want, live where they want, do what they want with it - they might prefer to rent for ease of mobility and spend the money on education for the kids/whatever.

Yeah over last few weeks im already thinking cash is maybe better, freedom is huge. Some problems with this though is the 2 family members we planned on helping are married also, both probably in unhappy marriages also, so by giving cash you end up giving large amount of money to the partners which we dont want to do. Unless there is a way to give a cash gift to a married person and in the event of divorce they dont have to give half to the partner? (whatever we give would very likely be spent paying of mortgage in 1 case or to help buy first house in other case)

G_M

Put it in a trust, with yourself as trustee?

trailingspouse

Why the urge to help?

Charity begins at home.

If the people you want to help are your own kids, then the best thing you can do is give them the ability to be independent. There's something to be said for having to make it on your own.

And do you think a rocky marriage would be helped by one partner having money that the other wasn't supposed to benefit from??

Leave them your money in your will - there's no need to jump the gun, as it were.

PokerPlayer111

G_M wrote: »

Put it in a trust, with yourself as trustee?

ok sounds interesting, will have to look into what that would mean:)

PokerPlayer111

trailingspouse wrote: »

Why the urge to help?

Charity begins at home.

If the people you want to help are your own kids, then the best thing you can do is give them the ability to be independent. There's something to be said for having to make it on your own.

And do you think a rocky marriage would be helped by one partner having money that the other wasn't supposed to benefit from??

Leave them your money in your will - there's no need to jump the gun, as it were.

People we want to help are siblings. The urge to help is everyone growing up dirt poor i think. Either that or i'm wanting to buy more respect in the family - things might not end well if thats the case haha.

Me and my partner have not yet had kids, we have no plans.

Their rocky marriages could be affected in the scenario of 1 getting money and partner not yeah but i think that would be their responsibility to work out, im only looking to give to 1, not take from partner.

PokerPlayer111

trailingspouse wrote: »

Charity begins at home.

All i feel i need in life is house paid off + a solid regular income. What do you need after that?

moneyistooshorttomention

PokerPlayer111 wrote: »

If a family member were to help you out in life what would you prefer? a house bought for you to live in rent free for pretty much your whole life but not in your name or would you prefer just the cash but probably at half the value of house, or maybe even less like 33% or maybe even 20%.

Sometimes if you help people, in some ways they dont like it right? i have all the usual problems in my family, big egos, nobody really gets along truly. Is helping at all even a good idea, or maybe its best to just be there for people?

Personally speaking - I've got a grabby brother and so that would be my main reason why I would prefer to be given the cash full stop. Any gift to me would be something he couldnt get his hands on. Whereas a house of mine that wasnt in my name (ie because it was still in your name) would have me feeling fearful that my brother would grab for at least some of the equity in it come the time and I'd have a "battle royal" on my hands trying to keep my own home. Grabby type relatives can/do always think up an excuse as to why they personally should "have more" come the time and I'm only too thankful that the "roof over my head" is 100% mine and he can't manage to touch that (much as he's clearly been dropping hints it should be his/his family's if I pop off before him....).

Also - it would be difficult for me to sell my own home and move to another home if I decided to - if it wasnt actually in my own name. Whereas, if my house was in my own name then (even if there was a mortgage on it) = I could sell it to buy another instead without any problem.

So - give them the money and that's an end of it. It will make life easier for them and they won't have to worry whether any grabby sibling might go for the roof over their head.

PokerPlayer111

moneyistooshorttomention wrote: »

Personally speaking - I've got a grabby brother and so that would be my main reason why I would prefer to be given the cash full stop. Any gift to me would be something he couldnt get his hands on. Whereas a house of mine that wasnt in my name (ie because it was still in your name) would have me feeling fearful that my brother would grab for at least some of the equity in it come the time and I'd have a "battle royal" on my hands trying to keep my own home. Grabby type relatives can/do always think up an excuse as to why they personally should "have more" come the time and I'm only too thankful that the "roof over my head" is 100% mine and he can't manage to touch that (much as he's clearly been dropping hints it should be his/his family's if I pop off before him....).

Also - it would be difficult for me to sell my own home and move to another home if I decided to - if it wasnt actually in my own name. Whereas, if my house was in my own name then (even if there was a mortgage on it) = I could sell it to buy another instead without any problem.

So - give them the money and that's an end of it. It will make life easier for them and they won't have to worry whether any grabby sibling might go for the roof over their head.

Oh yeah i think my family members can sometimes have hard time with fairness and could potentially come up with poor reasons why they deserve X more. I dont relate to people like this very well. Has to be a good well thought out logic why someone deserves more.

So with your grabby brother would you ever help them financially? at all? Lets say the context is just to boost their lifestyle, so important stuff but no special circumstances.

hunters

PokerPlayer111 wrote: »

All i feel i need in life is house paid off + a solid regular income. What do you need after that?

A decent pension.