Loan to mother in law

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  • Tiggy777
    Tiggy777 Posts: 78 Forumite
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    AnotherJoe wrote: »
    To get back to OP's actual question, just document it as a loan which she acknowledges with a signed statement, witnessed by two others and also take a copy of your and her bank account statements showing the money being transferred between you.
    The loan agreement can specify that the amount due upon death is either matched to the change in value of the apartment as a %, eg apartment goes up by 25%, OP gets back £25k, (though that could lead to a decrease) or use a published government figure such as RPI or CPI.


    Thank you very much for your advice on this issue....I acknowledge others have replied and I thank those for information relevant to my question :)
  • ReadingTim
    ReadingTim Posts: 3,970 Forumite
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    iolanthe07 wrote: »
    Why the hostility? Of course it is right that people should use the wealth in their property to pay for their care. I was just trying to point out a potential pitfall.

    No hostility, but your choice of language revealed rather more than someone 'just pointing out a pitfall'....
  • T-G-C
    T-G-C Posts: 591 Forumite
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    I do not know much about this kind of stuff and could be wrong, but perhaps purchasing X% of the property with the £20,000 rather than her using it to purchase 100% of the property would be better? When she passes away, creditors and whatever else cannot touch the percentage of value that you own. This means securing your "investment" so to speak, but like I said, it is something I thought of while reading this and do not know / need to know much about property etc. in my stage of life.
    Advice provided from this account does not consist of any professional knowledge. For professional debt advice, please contact either National Debtline or StepChange. Advice may consist of personal experience, opinion and/or informational sources.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Thats a possibility. It would cost more to set up (a loan note signed and witness need cost nothing) whereas a fractional property purchase would definitely need legal advice, and also lead to potential CGT payable upon death (realistically it wont be much though) . Although a return above amount loaned due to being linked to RPI etc would also be a possible interest income, and thus incur tax as well.


    It might also lead to other issues, for example what happens with council tax, insurance etc etc, due you legally need to pay your share? And if the home has certain restrictions especially age related, eg owner must be aged 55 or over, might not be possible.
  • Exodi
    Exodi Posts: 2,867 Forumite
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    agne.bag1 wrote: »
    A friend was talking about this the other day and it was suggested to her to do something called tenants-in-common.
    Unsure if you can do this on a retirement property though.

    I think this is a really awkward way of achieving what could also just be done in a will, there are also numerous reasons why the OP may not want to be legally classed as owning multiple properties...

    If it's to protect a share of the house for himself against care costs, I'm pretty sure they've cracked down on deprivation of assets (so it could go really go either way should care costs come into question).
    Know what you don't
  • Shakin_Steve
    Shakin_Steve Posts: 2,701 Forumite
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    Just tell her 'No'. Sorted.:D
    I came into this world with nothing and I've got most of it left.
  • CKhalvashi
    CKhalvashi Posts: 12,060 Forumite
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    agne.bag1 wrote: »
    A friend was talking about this the other day and it was suggested to her to do something called tenants-in-common.
    Unsure if you can do this on a retirement property though.

    I was just going to suggest this,

    OP owns 10% of the apartment in this case, and as long as prices remain flat/go up,m5e result is fair to everyone.

    Obviously thismis only to be suggested if they have the money and are unlikely to need it.
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