Buying a House in Trust

ld123098

I'm looking to buy a house with a mortgage for my son. He won't be moving out for years, so the plan is to rent the property out. I'll be using money from his savings to put down a deposit, and any profit from renting will just go back into his savings or towards paying the mortgage off early. I don't want him to get the house until I think he's ready though as being given a house at 18 is a huge responsibility. Is this possible? How do I go about tax issues (paying income tax, gift tax etc)
Any advice is much appreciated

moneysavinghero

Why use the house as some sort of weapon against him? If it's his savings that you are using to pay the deposit then it should be his choice when he feels he is ok to start paying the mortgage on it. At 18 he is an adult after all.

davidmcn

ld123098 said:

I'll be using money from his savings to put down a deposit

You can't, it isn't your money.

Do you mean he's going to gift you his savings so you can buy this house, and hope that eventually you'll give him the house? Does he want to do that?

AdrianC

ld123098 said:

I'm looking to buy a house with a mortgage for my son. He won't be moving out for years, so the plan is to rent the property out. I'll be using money from his savings to put down a deposit, and any profit from renting will just go back into his savings or towards paying the mortgage off early. I don't want him to get the house until I think he's ready though as being given a house at 18 is a huge responsibility. Is this possible? How do I go about tax issues (paying income tax, gift tax etc)

This is a terrible plan on so many levels...

You're planning to unilaterally take your son's savings to buy him a business that he probably doesn't want to run himself, all so that you can eventually tell him that he's too young to take responsibility for his own life.

Apart from anything else, think of the practicalities - is he going to be able to get a mortgage?

ld123098

AdrianC said:

ld123098 said:

I'm looking to buy a house with a mortgage for my son. He won't be moving out for years, so the plan is to rent the property out. I'll be using money from his savings to put down a deposit, and any profit from renting will just go back into his savings or towards paying the mortgage off early. I don't want him to get the house until I think he's ready though as being given a house at 18 is a huge responsibility. Is this possible? How do I go about tax issues (paying income tax, gift tax etc)

This is a terrible plan on so many levels...

You're planning to unilaterally take your son's savings to buy him a business that he probably doesn't want to run himself, all so that you can eventually tell him that he's too young to take responsibility for his own life.

Apart from anything else, think of the practicalities - is he going to be able to get a mortgage?

I'm planning on investing money that me and my wife have put away for my son (he hasn't saved a penny) into a property, because the rent would yield better returns for him than savings do. I'm not taking anything from him, I'm trying to give him the best leg up onto the property ladder that I can. 

ld123098

davidmcn said:

ld123098 said:

I'll be using money from his savings to put down a deposit

You can't, it isn't your money.

Do you mean he's going to gift you his savings so you can buy this house, and hope that eventually you'll give him the house? Does he want to do that?

My son hasn't saved a penny. It's money we have been putting in a bank account to get him on the property ladder. I could withdraw the money tomorrow and spend it if I liked, but that isn't my aim. Don't judge everyone by your own low morals. And yes, I don't want him to have potentially over £100,000 at 18 if I think he's just going to blow it. If you think securing my son's future is a bad thing, that's your cross to bear.....

elsien

So the house, the deposit, the mortgage and the business of being a landlord will all be in your name, with the intention of passing it on to him when you feel he is ready? 

Is any of the money your son’s in any legal sense, rather than money you and your wife have in your own names but earmarked for him (all being well) in the future? 

hazyjo

But it's his money. Why don't you buy a property if that's what you want to do, or make other investments, with your money and sell it/cash it in and gift him the money later.

He might not even want to own a property! Not everyone does.

How old is he? A child, or teens? I mean, can he actually have any input or opinion with this decision?

ld123098

elsien said:

So the house, the deposit, the mortgage and the business of being a landlord will all be in your name, with the intention of passing it on to him when you feel he is ready? 

Is any of the money your son’s in any legal sense, rather than money you and your wife have in your own names but earmarked for him (all being well) in the future? 

The savings are in a child savings account in his name, and my wife's name as being responsible (I'm not 100% how child savers work). And yes, that is exactly the plan. My thinking is that the rent will return better than savings, then when he's ready to get on the property ladder he can sell the property to use the equity as a deposit (which should have grown larger than the initial investment).
Thanks for your time.

ld123098

hazyjo said:

But it's his money. Why don't you buy a property if that's what you want to do, or make other investments, with your money and sell it/cash it in and gift him the money later.

He might not even want to own a property! Not everyone does.

How old is he? A child, or teens? I mean, can he actually have any input or opinion with this decision?

He's a child, why would I give him an input. All he's interested in is playing Fortnight. If I gift him a large amount of money I assume he'll pay tax. 

elsien

How old is he now?