Gifted deposit question

imamutant

Hi,

I'm gifting my brother some money for a depost. I'm giving it as a 'gift' instead of a 'loan' as its to my understanding that some lenders do not like that it will be loaned. I don't want to earn any interest on the money but want to ensure the amount is returned to me after the house is sold in the future. Is it possible to gift the deposit money, but with a dead of trust that ensures the money is paid back? Or is this not possible? Thankyou

Mojisola

If it's going to be paid back, it's not a gift!

You will have to sign paperwork to say that it's a gift and that you have no financial interest in the property.

ciderboy2009

I would suggest that it's not a good idea for your brother to make a fraudulent mortgage application or for you to make a fraudulent statement as part of that application.

user1977

No. A gift is a gift. No strings attached. 

Keep_pedalling

You already had good advice on this back in April.

https://forums.moneysavingexpert.com/discussion/6348376/best-way-to-go-about-gifting-a-house-deposit#latest

eddddy

If you give your brother money as a gift to buy the house, your brother can choose to give you an equal amount of money as a gift when he sells the house.

But he is equally free to choose not to give you a gift when he sells the house.  And there will be no (legal) way of making him give you a gift.


(And there may be circumstances where he doesn't have the money to give you a gift, even if he wanted to - for example, the house value has dropped, he's gone bankrupt, he's had to pay a divorce settlement, he's had to pay off debts, etc.)

imamutant

ciderboy2009 said:

I would suggest that it's not a good idea for your brother to make a fraudulent mortgage application or for you to make a fraudulent statement as part of that application.

Thanks for the replies everyone!

What part of my questions indicates a fraudulent application? I'm gifting the deposit money, and his solicitor has sent me the Gift Declaration for signing. In this letter is the following question... "Is there a Deed Of Trust?".

My question is simply asking: Can I tick yes and have a deed that states the monies I gifted are mine?

imamutant

eddddy said:

If you give your brother money as a gift to buy the house, your brother can choose to give you an equal amount of money as a gift when he sells the house.

But he is equally free to choose not to give you a gift when he sells the house.  And there will be no (legal) way of making him give you a gift.


(And there may be circumstances where he doesn't have the money to give you a gift, even if he wanted to - for example, the house value has dropped, he's gone bankrupt, he's had to pay a divorce settlement, he's had to pay off debts, etc.)

Understood, thank you!

imamutant

Keep_pedalling said:

You already had good advice on this back in April.

https://forums.moneysavingexpert.com/discussion/6348376/best-way-to-go-about-gifting-a-house-deposit#latest

Yes I did, but my new question is asking about if it's possible to have a deed of trust written into the gift, as my Gift Declaration letter makes it sound as if it's possible, so I just wanted some clarification. Thankyou to those that answered

imamutant

Mojisola said:

If it's going to be paid back, it's not a gift!

You will have to sign paperwork to say that it's a gift and that you have no financial interest in the property.

Yes I know, my paperwork to sign asks if there is a deed of trust, hence my question. Thanks for the answer

MaryNB

imamutant said:

ciderboy2009 said:

I would suggest that it's not a good idea for your brother to make a fraudulent mortgage application or for you to make a fraudulent statement as part of that application.

Thanks for the replies everyone!

What part of my questions indicates a fraudulent application? I'm gifting the deposit money, and his solicitor has sent me the Gift Declaration for signing. In this letter is the following question... "Is there a Deed Of Trust?".

My question is simply asking: Can I tick yes and have a deed that states the monies I gifted are mine?

It's fraudulent if you declare it as a gift but expect it to be paid back. It's either a gift or a loan. You said it your opening post that you are calling it a gift to avoid the issue that lenders don't like loans from family, not because it is actually a gift that you don't want returned. That's fraud.