Gifting house and mortgage to daughter

mrh1

My wife and I are about to downsize and dispose of our £500K house. We would like our daughter to have the house, but we need to keep £200K for ourselves and we have a £117K mortgage and a further £55k in equity release secured on the house, both of which are in my wife and my joint names. My daughter's own property is up for sale, she has no mortgage on it and when sold she will have £255K net from the sale. We could just sell her our house for £372K (she would need use her £255K and get a 117k Mortgage) but we would incur £3,400 in early repayment fees on our borrowing. She would also need to pay stamp duty on the £372K purchase. Is there any way to reduce/avoid the stamp duty and early repayment?
For instance, my daughter bought her house 4 years ago, using £255K that my mother gave/lent her. Since she was given the money my daughter has been paying my mother £300 per month "interest". When my daughter sells her house, what if she gives my mother back her £255K and my mother then gives me the £255K as a gift. My mother gave away all her other assets more than 7 years ago. Could I then pay off the £55k equity release and gift my daughter my house and mortgage? I did speak to my lender - HSBC about gifting my house and mortgage to my daughter. They originally said it wasn't possible - something about it being illegal to disclose any information about my mortgage details to a third party (my daughter). They then had a think about it and said that I could do a transfer of title to add my daughter to the mortgage - replacing my wife, then do another transfer of title, removing me. Seems a bit long winded - but at least they said it was possible. They also said I could only transfer the mortgage, not the equity release (which HSBC calls a “homeowner loan”) – is this correct?
I guess next step is talk to a solicitor ...
Martin

ACG

You can not gift a Mortgage...even if you could, it is not a great gift is it?
Surprise, heres a debt of £100k plus.

You can the equity or part there of. That would mean your daughter getting her own mortgage combined with her savings to the amount that you would want from her.

Browntoa

And sounds like a possible mess of tax liability down the line.

And possibly deprivation of assets ( 7 year rules don't stop council claiming deprivation )

Keep_pedalling

I would suggest your entire family get some independand financial advise. There already seems to be one half cocked scheme in place between your mother and daughter. There is no way that transaction can be considered a gift if your daughter is paying interest on it, so if part of the reason it was done was IHT planning that has failed.

Now it seems you want to make your latter years insecure by giving away a major portion of your assets, and at the same time lumber your daughter with a pile of dept she does not really need, just so you can keep your home in the family.

Let it go, and let you daughter buy something more sensible and of her own choosing.

AnotherJoe

mrh1, please send me your details as Christmas is coming up and I'd like to gift you my mortgage



No, that doesn't really work does it ?

sheepy21

So house is worth 500k-
200k- (money you need)
117k- (pay off mortgage)
55k. (Pay equity release)
That only leaves you 128k to gift to your daughter. If she’s then going to give all the money from the house sale to your mum, there’s no way she can get a mortgage unless she’s earning upwards of 80k.
I can’t see this working, you’re trying to move large sums of money around the family and gift a mortgage which isn’t possible

ACG

sheepy21 wrote: »

That only leaves you 128k to gift to your daughter.

Love it!
If I get £128 from my parents Ill be lucky :rotfl:

sheepy21

ACG wrote: »

Love it!
If I get £128 from my parents Ill be lucky :rotfl:

Yeah I didn’t mean it like that :rotfl: but op was talking about the daughter only need 117k mortgage like they have, with the assumption of them giving a higher amount of money

p00hsticks

mrh1 wrote: »

Since she was given the money my daughter has been paying my mother £300 per month "interest".

Hopefully your mother is declaring this to HMRC as it counts as taxable income.....