Buying a house fully with cash from father

pinklady21

Yes - I agree. My post was simply to clarify to the O/P what another poster meant, and something to consider in the grand scheme of things.

Lauraairving

There’s nothing more to this story. My dad originally thought my mums insurance through her work was 4 times her salary and in fact it was 8 times. He just wants me and my children to live comfortably without paying rent or mortgage. He doesn’t see the point in the money being sat in his bank account when it could be helping us. I’m so grateful for what he’s doing for us I just want to make sure we do it right as you can see none of us have any idea what we need to do. My mum was a mortgage advisor so she dealt with all of mums and dads finances. Thanks so much for all your replies

Slinky

Is there a will and has it been sorted/through probate yet? The most efficient way to get the money to you without creating a tax problem for your Dad could be by doing a deed of variation to the original will, effectively leaving some money to you. This needs to be done within 2 years of death. You may want to seek professional advice.

3card

Lauraairving wrote: »

My mum and dad we’re married so all assets were joint. Their assets weren’t more than the limit when she passed away. His house is worth about 90k and this one will be around 110k hopefully once all done up. He has a life insurance for £200,000 so I don’t know if that makes a difference.

I apologise if this is already mentioned but i couldnt see it.
Is your Dads life insurance subject to a trust arrangement which, i believe, would take this element out of any inheritance tax figures.
Also I'm sure this also makes it quicker and easier for the policy to be paid out

I stand corrected on both points if i am totally wrong

tlc678910

Something else to consider (or dismiss as not relevant) if you have a partner and are married or you choose to register the property as joint tenants your partner will likely get half the equity if you split up in the future. If your dad keeps ownership and you were to split before his death your partner would not walk away with any equity.

I'm not saying that to be mean to your partner but sometimes the older generation find the thought of large amounts of their worldly goods leaving the bloodline upsetting.

Similarly if you are married or joint tenants and you die your partner would likely inherit the whole property. If he remarried and for example predeceased his new partner your children may not go on to inherit from it. If your dad kept the ownership in his possession and you died he might choose to will his worldly goods to his grandchildren rather than your partner.

You might not find these scenarios likely enough to worry about but it doesn't hurt to give it some brief thought.

On the other hand in your dad does buy and hold the property it makes it trickier for you to move house and the property could be at risk if your father needed care in the future as it would be an asset of his.

Lots to weigh up

Flugelhorn

re the deprivation of capital, if your father feels able to give away 90+K now then it is likely that he will have enough to fund his own care if needed in the future and it becomes less of an issue. If however he was aware that he needed care and then gave away nearly all his money than that would become an issue for council to look at.

Think it is great that your Dad is spending this money this way, making good use of it now - hopefully you won't have to worry about the inheritance tax issues mentioned above as he will live for many years yet.

Also appreciate you may think this will never happen but Dad being as young as he is, may remarry - (a relative was married for 28 years to first wife and then remarried at that age 8 months after her death, he was widowed a further 27 years later so it can happen)
might need to have a chat with him about his current will if that happens as it will be invalid and need redoing