Tenants in common with Mum, lots of questions.

xylophone

You could have an agreement drawn up that would allow you 10% of the value of the house at date of sale - there would be a CGT implication but that would be there anyway if you bought with your mother and subsequently sold as you would not have any PPR exemption.

[Deleted User]

PrinnyPree said:

Lover_of_Lycra said:

PrinnyPree said:

Oh well that makes it a possibility again  I'd feel some how morally wrong lending my mum money with interest. I wouldn't be interested in collecting in her lifetime and I think it might look shady in my siblings eyes when I came to collect out of the inheritence in the distant future.  Part investing in property seems neater morally even though maybe slightly complicated legally. 

As for not having to pay stamp for my portion I'm assuming my Mum would still have to pay normal stamp on the full 350k not just her 315k portion?

You don't have to charge your mum interest on the loan.

I'd still be paying interest on my mortgage which I could wipe without giving the loan,  also its to get my Mum a nicer house its not that she can't get a house without my help and moving is her idea. If I lend my Mum the 35k for 20+ years no interest that could have been invested in my pension or my own house, the 10 90 split is a mutually beneficial one. An interest free loan would put me at a loss. X

This makes no sense.  Whether you lend your mum the money or jointly buy the property with her you will be unable to use the money to reduce your own mortgage or to pay it into a pension.  Either way you will be tying your money up until the property is sold.

PrinnyPree

Mojisola said:

PrinnyPree said:

I wouldn't be interested in collecting in her lifetime and I think it might look shady in my siblings eyes when I came to collect out of the inheritence in the distant future. 

You could suggest to your siblings that you each loan your mother equal shares of the £10k she needs for the new house - you'll all get back what you put in when the house is eventually sold.

Both my siblings are using their inheritance to move to bigger houses, I don't think they'll have 10k each spare. Happy to suggest it to them though.

Mojisola

PrinnyPree said:

Both my siblings are using their inheritance to move to bigger houses, I don't think they'll have 10k each spare. Happy to suggest it to them though.

If you suggest it to them and they refuse to put any money into the new house, then why would you worry if they get upset when you get your money plus some interest back when the house is sold?

PrinnyPree

Lover_of_Lycra said:

PrinnyPree said:

Lover_of_Lycra said:

PrinnyPree said:

Oh well that makes it a possibility again  I'd feel some how morally wrong lending my mum money with interest. I wouldn't be interested in collecting in her lifetime and I think it might look shady in my siblings eyes when I came to collect out of the inheritence in the distant future.  Part investing in property seems neater morally even though maybe slightly complicated legally. 

As for not having to pay stamp for my portion I'm assuming my Mum would still have to pay normal stamp on the full 350k not just her 315k portion?

You don't have to charge your mum interest on the loan.

I'd still be paying interest on my mortgage which I could wipe without giving the loan,  also its to get my Mum a nicer house its not that she can't get a house without my help and moving is her idea. If I lend my Mum the 35k for 20+ years no interest that could have been invested in my pension or my own house, the 10 90 split is a mutually beneficial one. An interest free loan would put me at a loss. X

This makes no sense.  Whether you lend your mum the money or jointly buy the property with her you will be unable to use the money to reduce your own mortgage or to pay it into a pension.  Either way you will be tying your money up until the property is sold.

Because my 35k will be invested in property for decades which may have a similar return as any other investment? Sure I could come out with a loss but again same with any investment.  I'm not sure how this doesn't make financial sense?

PrinnyPree

Mojisola said:

PrinnyPree said:

Both my siblings are using their inheritance to move to bigger houses, I don't think they'll have 10k each spare. Happy to suggest it to them though.

If you suggest it to them and they refuse to put any money into the new house, then why would you worry if they get upset when you get your money plus some interest back when the house is sold?

For the same reasons that I'm being grilled on this forum? People seem to think I'm trying to make money out of my Mum, I just want to jointly invest in a property with her because shes seen one she likes that is out of her price range. I didn't even suggest a loan another poster did and now the topic is completely derailed from my original question.

xylophone

There is no reason for your siblings to get upset.
They are putting their inheritances into their own properties.
You, too, would be putting your money into property, either by buying with your mother or by lending her 10% of the value of her new property against a properly drafted legal agreement (secured by a first charge) to be paid 10% of the value of the property on sale.
All above board and perfectly simple.

PrinnyPree

xylophone said:

There is no reason for your siblings to get upset.
They are putting their inheritances into their own properties.
You, too, would be putting your money into property, either by buying with your mother or by lending her 10% of the value of her new property against a properly drafted legal agreement (secured by a first charge) to be paid 10% of the value of the property on sale.
All above board and perfectly simple.

Thankyou xylophone the previous posters made me feel like I was being underhand.  I'm happy enough to just pay off my own mortgage or invest the money in some other way like lifetime ISAs. My Mum will be able to find a slightly cheaper house eventually I'm sure. It was literally a question we thought of in the last 24 hours, a kind of what if that I thought was mutually beneficial.  But not something I would persue if either if us lost out financially, got taxed to the hilt of if family got upset.

[Deleted User]

PrinnyPree said:

Lover_of_Lycra said:

PrinnyPree said:

Lover_of_Lycra said:

PrinnyPree said:

Oh well that makes it a possibility again  I'd feel some how morally wrong lending my mum money with interest. I wouldn't be interested in collecting in her lifetime and I think it might look shady in my siblings eyes when I came to collect out of the inheritence in the distant future.  Part investing in property seems neater morally even though maybe slightly complicated legally. 

As for not having to pay stamp for my portion I'm assuming my Mum would still have to pay normal stamp on the full 350k not just her 315k portion?

You don't have to charge your mum interest on the loan.

I'd still be paying interest on my mortgage which I could wipe without giving the loan,  also its to get my Mum a nicer house its not that she can't get a house without my help and moving is her idea. If I lend my Mum the 35k for 20+ years no interest that could have been invested in my pension or my own house, the 10 90 split is a mutually beneficial one. An interest free loan would put me at a loss. X

This makes no sense.  Whether you lend your mum the money or jointly buy the property with her you will be unable to use the money to reduce your own mortgage or to pay it into a pension.  Either way you will be tying your money up until the property is sold.

Because my 35k will be invested in property for decades which may have a similar return as any other investment? Sure I could come out with a loss but again same with any investment.  I'm not sure how this doesn't make financial sense?

Property won't have the same return as any other investment.  If all investments gave exactly the same returns it would make it much easier to choose what to invest in.  What property does come with though is less favourable taxation eg CGT and who knows what that will look like in 20 years.  Properties also have to be maintained so how are you going to split the cost of that with your mum over the next two decades?

A loan, with or without interest, is cleaner.  Cleaner still would be for your mum to buy something buy herself or maybe even look at renting whilst you use your inheritance to do something else with.

xylophone

a kind of what if that I thought was mutually beneficial.

And it could well be. You just need to be aware that the capital you are putting in will no longer be readily accessible and that you are looking at (potentially), a 25 year plus investment period.