Selling Shares to buy house for daughter

totallyblessed

I have £150k in stocks and shares that I am considering selling to pay for a house. 

The house…. is currently owned by daughter No2 who is moving away to an island and will be renting for the next year or two.  Daughter No1 wants to move into the house, buying it from her sister, I want to pay for it, no strings attached.  I’d rather see the money being enjoyed by the family now while I’m alive to see it.    I am more than comfortable, owning my own home and a couple of small rented properties.

I’ve thought about a few possible complications, but wondering if there is anything obvious that I’ve either missed or should consider.

So far I’ve thought about the CGT on the sale of shares, will get advice from a tax advisor next week.
Should I buy the house and then gift it to daughter No1  or Should I just give daughter No1 the money to buy the house herself.  
Another thought is, she gets a mortgage and I pay that monthly for her.

Constructive comments and suggestions gratefully received.  Thanks in advance.

Brie

Giving her the ££ has the danger that she might just blow it somewhere.  But buying the house and gifting would, I think, involve more CGT, fees, stamp duty etc so less value for the money.

Have you given a similar amount to D2?  If not there could be bad feelings.

El_Torro

Bear in mind that if you give your daughter this money your local council won't be willing to pay for your care home fees if you go into one in the coming years. Hopefully this won't be an issue but you never know what the future will bring. If you're not familiar with Depravation of Assets it's worth looking into it. 

How does your other daughter feel about you giving a large chunk of money to her sister? You can do what you like with your own money of course, probably not worth starting a family feud over it though. 


The simplest thing to do is to gift the money to your daughter and she buys it, rather than the other options you suggest. 

Keep_pedalling

If you can afford to do this then gifting cash is by far the best option. Assuming you own your own home and the house is in England and your daughter is a first time buyer then it will cost you an additional 5% SDLT El_Torro said:

Bear in mind that if you give your daughter this money your local council won't be willing to pay for your care home fees if you go into one in the coming years. Hopefully this won't be an issue but you never know what the future will bring. If you're not familiar with Depravation of Assets it's worth looking into it. 

The OP owns three properties deprivation of assets is not going to be an issue. 

El_Torro

Keep_pedalling said:

If you can afford to do this then gifting cash is by far the best option. Assuming you own your own home and the house is in England and your daughter is a first time buyer then it will cost you an additional 5% SDLT El_Torro said:

Bear in mind that if you give your daughter this money your local council won't be willing to pay for your care home fees if you go into one in the coming years. Hopefully this won't be an issue but you never know what the future will bring. If you're not familiar with Depravation of Assets it's worth looking into it. 

The OP owns three properties deprivation of assets is not going to be an issue. 

Maybe, maybe not. Plenty of people with multiple rental properties have a lot of mortgage debt.

Keep_pedalling

Assuming you are in England and daughter no2 is a first time buyer then gifting cash is going to be the sensible option. If you buy the house you will need to fork out a lot more SDLT than she would buying it yourself.

totallyblessed

Brie said:

Giving her the ££ has the danger that she might just blow it somewhere.  But buying the house and gifting would, I think, involve more CGT, fees, stamp duty etc so less value for the money.

Have you given a similar amount to D2?  If not there could be bad feelings.

As I said, I've invested in Daughter no2 by paying for things for this house - windows, solar - she is being treated very fairly (her words) as she reaps when the house sells.    but thanks for your concern. x

sheramber

Be prepared to show the conveyancer evidence of where the money came from. 

totallyblessed

sheramber said:

Be prepared to show the conveyancer evidence of where the money came from. 

Absolutely, I could just pay them directly that way they'll see it.  

GrubbyGirl_2

El_Torro said:

Bear in mind that if you give your daughter this money your local council won't be willing to pay for your care home fees if you go into one in the coming years. Hopefully this won't be an issue but you never know what the future will bring. If you're not familiar with Depravation of Assets it's worth looking into it. 

How does your other daughter feel about you giving a large chunk of money to her sister? You can do what you like with your own money of course, probably not worth starting a family feud over it though. 


The simplest thing to do is to gift the money to your daughter and she buys it, rather than the other options you suggest. 

That's not strictly true.  Yes if he is unwell and gives away a lot of money and in a year or 2 time he needs care then yes they may consider it as a deprivation of assets.  However if he is fit and healthy and there is no indication that he is going to need care then in the future (say 5 or 10 years time) he does need to go into care it will not be taken into account as he could not have reasonably predicted he would need care as he was fit and healthy when he made the gift.

It's irrelevant anyway as he states he also has a couple of other rental properties so he would never qualify for social services support anyway

Albermarle

totallyblessed said:

sheramber said:

Be prepared to show the conveyancer evidence of where the money came from. 

Absolutely, I could just pay them directly that way they'll see it.  

On another thread it seemed that some conveyancers want gifted money sent to them from the gifter, whilst others want the gift to be sent to the beneficiary, and all money to buy the house comes from the actual house buyer.
In reality it makes no difference. In both cases you will have to send evidence beforehand of where the money has come from, and some history.