Parents paying off mortgage 8 July 2021 at 12:19PM in Mortgage-free wannabe 3 replies 162 views

u16815

My parents have offered to pay the outstanding amount of my mortgage off!(about 67k) This is an amazing offer but now sure if they are allowed to do it or what might the tax implications may be!

LadyGnome

You would need to look at the inheritance tax rules on gifts.  From memory there is a 7 year taper for a gift over the annual allowance.
Another area you need to consider is deprivation of assets for benefits and social care purposes.  If someone needs funded social care the council can look back at large gifts / disposals of assets to see if they may have had an impact on the ability to pay at a time when the possible need for social care could be anticipated.

I am not an expert in either area but I would look into them.

L9XSS

Very good advice from @LadyGnome. It’s a very generous offer from your parents!

Frith

I have had similar (my dad sold my grandparents’ house that he had been renting out for years and gave me and my siblings a lump sum which almost cleared my mortgage). 

I haven’t looked into the social care issues (as neither parent needs that yet) but I can tell you that it is 40% if your parent dies within a year, tapering off to 0 after 7 years. 

Let’s hope we all remain fit and well for a long time!