Loan for Child buying house

Christine24

If i arrange through solicitor to Give an interest free loan for my child to buy a house would the loan repayments to me be tax free 

Woolsery

I don't think some children can buy houses, so how old is the 'child?'

Edi81

Lenders don’t like borrowed deposits. Please ensure your child tells their mortgage broker. 

Brie

I'm assuming you have looked at all the other issues with "giving" money to one's children?  

• loss of FTB status?
• what do you do if they decide not to repay you?
• what if they are made bankrupt or are divorced and need to sell/split the asset?

Not sure why someone giving back money could be taxable.  The interest, if any were charged, perhaps as it would be income.  But you say there would be 0 interest so no income.

DE_612183

I would guess if it's interest free, then yes there is no tax.

However you should have a contact drawn up, also establish what happens in the event of your demise ( solicitor should know how to not get clobbered for IHT ).

aoleks

borrow amount now
keep in your savings account for 3-6 months
make regular deposits of £1-200
gift deposit to your child
declare deposit as savings

Brie

aoleks said:

borrow amount now
keep in your savings account for 3-6 months
make regular deposits of £1-200
gift deposit to your child
declare deposit as savings

I don't understand any of this.  What does it do with the OP lending money at 0%?

canaldumidi

Children cannot buy property. You'd need to purchase the property within a trust.

If the trust repays the loan there is no income tax to pay unless interest is also paid.

aoleks

Brie said:

aoleks said:

borrow amount now
keep in your savings account for 3-6 months
make regular deposits of £1-200
gift deposit to your child
declare deposit as savings

I don't understand any of this.  What does it do with the OP lending money at 0%?

my bad, I assumed OP wants to gift his child money to put down as a deposit. it turns out it's a crazy idea instead...

user1977

canaldumidi said:

Children cannot buy property.

Er, they can if the OP's children are adults.

Are people here genuinely unfamiliar with "child" being used to mean one's immediate descendants, of any age?

GentleGiant01

aoleks said:

borrow amount now
keep in your savings account for 3-6 months
make regular deposits of £1-200
gift deposit to your child
declare deposit as savings

I’d be cautious of doing this, IE I wouldn’t. 

If OP is “borrowing” money to “loan” to their child as a house deposit, but claiming it is savings, if caught, can cause a LOT of headaches for everyone involved. 

If OP has £100k in the bank, and their child wishes to purchase a home of £100K, and OP would like to draw up a repayment plan so the child has no mortgage, then there is nothing wrong with this so long as the OP crosses the T’a and dots the I’s with a solicitor / or happy to risk not getting their savings back. 

Either way, it’s a great step up to be in a position to have a parent help and I really hope the child appreciates having such a great parent