Paying Off Son's mortgage

chipsdog5a

If I pay off my son's mortgage providing its possible to overpay, is there any tax implications?  thank you

DullGreyGuy

Only if you die in the next 7 years

Keep_pedalling

DullGreyGuy said:

Only if you die in the next 7 years

If the OP dies within 7 years any IHT their estate has won’t be any higher than if they had hung on to their money. 

If the OP is married and the gift in excesses of their NRB then it could cause an unnecessary IHT bill but if that is the case a joint gift may be more appropriate. 

Brie

The other concern may be deprivation of assets if at any time you become dependent on the local authority to pay your care fees.  If they know you've "given away" money they may look to the receiver of the money (son) to fund instead and potentially put a lien on his home if he doesn't have the cash. 

MWT

Keep_pedalling said:

DullGreyGuy said:

Only if you die in the next 7 years

If the OP dies within 7 years any IHT their estate has won’t be any higher than if they had hung on to their money. 

That is true, but if the choices were to pay off the mortgage or make a regular payment equivalent to the mortgage payment from monthly disposable income, or take a world cruise, then one has potential IHT implications, the others do not...

... but 'potential' vs mortgage interest reality means it is probably still worth paying it off if the capital is certainly not needed for foreseeable costs.