What a maze!

bunnyfuller

We (husband and I) are hoping to retire in 5 years.  Mortgage will be paid off, and this is what we would like to do:

Buy/gift money for a small house in the UK for our 2 adult daughters.

Buy a property in Cyprus under the Golden Visa programme, we meet the income criteria after the recent hike, thankfully. Overall budget will be around £500k today’s money.  We will not be state retirement age, or very near it.

I’ve been reading up and there are obviously many ways to skin this particular cat.

My idea would be:

Sell the house, go into short term rented.  Gift money to kids to then pay for their purchase (would they be able to start the purchase process on the back of the expected money from us?  We would insist there are some controls written into it to protect them both individually and jointly. Budget for them would be around 200k.

Furniture into storage/given to kids/sold/freecycled
We would then head over to an AirBnb to work on our purchase, hopefully having already picked a place and locked in the rate.


Could a critical friend point out the flaws/tax trip hazards or any better ideas.  Thank you 🙏🏻 

silvercar

A flaw is what happens when one of your kids wants to move out or move someone else in?

No tax on gifts in the UK, and it only becomes at risk of inheritance tax if your estate is large enough and you don’t last 7 years. If you put the property in the name of the kids, they lose their first time buyer status when they want to move out and buy a place of their own.

Scotbot

Finding short term rental is challenging and expensive. Golden visa schemes can be withdrawn with little notice, Portugal and Spain have just withdrawn theirs.

Hoenir

Why not gift them a £100k each. Allow them to buy seperate properties. Rather than being tied together. 

user1977

bunnyfuller said:

We would insist there are some controls written into it to protect them both individually and jointly.

Like what, and how are you going to do that? They're grown-ups, are you expecting to retain some sort of control over the property?

bunnyfuller

Thanks Silver, we intend to make it so they can’t move other people in, they will need to sell at the point of wanting something different.

thanks again

propertyrental

Buying a joint property for them, (or gifting the £ for a joint property) is a bad idea. They may get on well now, but the future is unknown. And their circumstances might well change.

Just read the forum for examples of where joint ownership has gone t*ts-up!

Gift them each whatever amount you want and let them use it independently as they wish.

Ms_Chocaholic

Do your daughters live together now or will this be a new arrangement.

Albermarle

bunnyfuller said:

Thanks Silver, we intend to make it so they can’t move other people in, they will need to sell at the point of wanting something different.

thanks again

I am not a legal person, but I would think that will be pretty difficult to arrange.
This suggestion in a previous post is better and much simpler, and less likely to cause family arguments.

Gift them each whatever amount you want and let them use it independently as they wish.

FreeBear

Scotbot said: Golden visa schemes can be withdrawn with little notice, Portugal and Spain have just withdrawn theirs.

Whilst Spain may have withdrawn their golden visa scheme, Portugal's is still running. However, you can no longer invest in property or transfer capital investments to qualify. Quite likely the rules will change again before too long, so I've missed the boat on buying up a Quinta in the Douro Valley

landsbeyondthesea

bunnyfuller said:

  Gift money to kids to then pay for their purchase (would they be able to start the purchase process on the back of the expected money from us?  We would insist there are some controls written into it to protect them both individually and jointly. Budget for them would be around 200k. 

I'm not sure how the money is a gift if you want to write something that controls how it is used. I understand a gift as something given with no conditions. There could be implications around restricting its use or disposal.